In the long term, the leading cryptocurrency could reach $266,000 as it becomes “more attractive than gold,” reports The Block, citing analysts from JPMorgan.
The report notes that over the past week, market pressure has intensified amid a decline in risk assets, particularly in the tech sector. Traditional safe havens like gold and silver have also experienced sharp corrections.
Investor confidence was further shaken by the hack of the DeFi platform Step Finance based on Solana, resulting in a $29 million loss.
The recent correction pushed Bitcoin’s price below the estimated cost of production, historically a “soft lower boundary.” Experts estimate this figure to be around $87,000.
If prices remain below this level for an extended period, unprofitable miners will begin to exit the market. This, in turn, will lead to a decrease in production costs, analysts explained.
The drop from approximately $73,300 to a local low of $60,000 within a day was about 18%.
Defying the Skeptics
Despite the current negativity, JPMorgan maintains a positive long-term outlook.
“The significant outperformance of gold over Bitcoin since last October, combined with the sharp increase in precious metal volatility, has made the leading cryptocurrency even more attractive compared to gold in the long term,” the analysts stated.
They emphasized that the volatility ratio of the leading cryptocurrency to gold has fallen to about 1.5—a record low level. This makes Bitcoin “increasingly attractive.”
Not This Year
According to the model, for parity with private investments in gold (around $8 trillion excluding central bank reserves), Bitcoin’s market capitalization should match a price of $266,000 per coin.
Analysts called this target “unrealistic” for the current year. However, the calculations demonstrate long-term growth potential after a shift in market sentiment, when the asset once again becomes an attractive tool for hedging macro risks.
In November last year, experts considered a rise to $170,000 within 6–12 months, based on comparisons with precious metals adjusted for volatility.
The new target is significantly higher but suggests a more distant outlook. The revised estimate follows the bank’s increased long-term forecast for gold to $8,000–8,500.
An Ambiguous Situation
Despite the overall market weakness, the volume of liquidations in derivatives markets was lower than in the previous quarter. The deleveraging in perpetual futures was smoother compared to the October wave.
Institutional losses on CME also decreased compared to the previous reporting period.
ETFs
Fund flows in exchange-traded funds confirm negative sentiment. The ongoing outflow from spot Bitcoin and Ethereum ETFs indicates weak demand from both retail and institutional investors.
Stablecoins
The supply of “stablecoins” has slightly decreased in recent weeks, reflecting market participants’ caution. However, analysts do not view this as a signal of capital flight.
Experts describe this trend as a natural reaction to the decline in overall capitalization. Historically, the volume of stablecoins correlates with the market: as prices fall, the ecosystem requires less liquidity.
Back in April, JPMorgan analysts predicted an influx of large capital into the crypto industry.