JPMorgan says Bitcoin stability will bring bigger investors back in

Bitcoin’s price swings have eased significantly, according to JPMorgan, with volatility falling from 60% at the start of 2025 to about 30% now.

That decline could draw large institutional investors back to the market—firms that previously reduced exposure when Bitcoin’s movements were considered too unpredictable.

Nikolaos Panigirtzoglou, a strategist at JPMorgan, said Thursday that if Bitcoin’s volatility continues to decline and begins to align with traditional assets such as gold, investment allocations could increase.

“Expect that the allocations to Bitcoin by institutional investors could match those of competing asset classes such as gold if there is convergence in volatilities,” he wrote. At present, the difference between Bitcoin’s and gold’s volatility is at a historic low, according to him.

Corporate withdrawals contribute to stability

JPMorgan attributes part of the shift to corporate treasurers reducing the circulation of Bitcoin over the past year. This has reduced trading activity, limiting both rapid selling and speculative buying, and helping to moderate volatility.

These companies—many following strategies similar to MicroStrategy—now hold more than 6% of Bitcoin’s total supply, according to the bank.

At the same time, their inclusion in global equity indices has added further visibility and legitimacy. JPMorgan said this trend is “helping to make Bitcoin more attractive from a valuation point of view.”

The issue, Panigirtzoglou noted, comes down to risk. “For most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class,” he explained.

In other words, a more stable Bitcoin could encourage greater participation. With a current market capitalization near $2.2 trillion, Bitcoin would need to rise about 13% to match the private-sector investment level in gold—roughly $5 trillion—on a volatility-adjusted basis.

That would imply a price near $126,000, slightly above the record reached last weekend.

At present, Bitcoin’s price remains below that mark. Panigirtzoglou said the gap between Bitcoin’s price and JPMorgan’s volatility-adjusted comparison to gold shifted from a positive difference in late 2024, when the asset traded near $36,000, to negative territory now—leaving the current price about $16,000 below the model estimate.

He concluded that the discrepancy suggests “some upside potential for Bitcoin currently.” As of Thursday, Bitcoin was trading around 10% below its recent all-time high.