Despite recent market turbulence, JPMorgan remains remarkably optimistic about Bitcoin. The bank, once a vocal critic, has significantly shifted its stance, with analysts maintaining a price target of $170,000 (approximately €146,000) for the next six to twelve months.
Strategy Remains a Crucial Factor for Market Confidence #
A key element in their forecast is Strategy, Michael Saylor’s company which holds the world’s largest corporate Bitcoin treasury. Investors have been concerned that Strategy might be forced to sell its Bitcoin if the market continues to decline. However, JPMorgan deems this unlikely, stating in a client note last Wednesday that Strategy’s market-value-to-nav (mNAV) ratio stands at around 1.1, comfortably above the critical 1.0 threshold.
Furthermore, Strategy has a €1.2 billion cash buffer, which the bank estimates could cover interest and dividend obligations for about 18 months without needing to liquidate any Bitcoin. This significantly reduces the risk of a forced sale, according to JPMorgan.
Potential Boost from MSCI Decision #
Another potential catalyst is an upcoming decision from index provider MSCI on January 15. MSCI is considering delisting companies with more than 50% of their assets in digital assets from its indices. Such a move could see Strategy removed from major indices, potentially triggering billions in outflows.
However, JPMorgan emphasizes that much of this fear is already priced in. A positive decision could instead serve as a catalyst for a significant rally, allowing both Strategy and Bitcoin to rebound to pre-crash levels from October 10.
Bitcoin Increasingly Behaves Like “Digital Gold,” According to JPMorgan #
The core of JPMorgan’s optimism lies in its model comparing Bitcoin to gold, adjusted for volatility. This model has long pointed to a theoretical value of around €146,000, despite Bitcoin’s current price hovering near €77,000.
The bank notes that Bitcoin increasingly behaves like gold during periods of economic uncertainty, acting as a safe haven for capital. This dynamic was evident in April when tensions in U.S. equity markets drove investors toward crypto and other ‘safe assets.’
While the recent price downturn has introduced uncertainty, JPMorgan sees stable fundamentals: Strategy’s strong position, a potentially positive MSCI outcome, and a valuation model that consistently suggests a higher intrinsic value than the current market price. Whether Bitcoin will actually reach €146,000 remains to be seen, but the bank believes the potential is far from gone.