JPMorgan's analysis indicates that Bitcoin may be undervalued compared to gold due to its low volatility, which could attract institutional investment.
Bitcoin's Low Volatility
A recent report from JPMorgan claims that Bitcoin's decreased volatility positions it as undervalued compared to gold. Research shows that Bitcoin's volatility has reached historically low levels, making it a more appealing asset for institutional investors.
Rising Institutional Interest
Institutional interest in Bitcoin is increasing, as corporate treasuries hold over 6% of Bitcoin's total supply. This attention is driven by the cryptocurrency's low volatility and its inclusion in various indices, such as FTSE Russell. JPMorgan predicts this could lead to significant institutional adoption of Bitcoin.
Comparison of Bitcoin and Gold
JPMorgan notes that although Bitcoin and gold have traditionally been compared as value stores, the convergence of their volatility is now a crucial factor to consider. The decreasing gap in volatility between Bitcoin and gold may enhance portfolio diversification for institutional investors.
Thus, JPMorgan suggests that the decline in Bitcoin's volatility and its increasing popularity among institutional investors could be key factors in reassessing the asset in the market.
