JPMorgan says bitcoin could reach $266,000 'long term' as it looks more attractive than gold

Bitcoin could reach $266,000 "over the long term" as it increasingly looks more attractive than gold, even as crypto markets face near-term pressure from weak sentiment, according to JPMorgan analysts.

Crypto markets have come under renewed pressure over the past week as broader risk assets, particularly technology stocks, weakened and traditional hedges such as gold and silver also saw a sharp correction, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou said in a report on Wednesday. A $29 million hack of Solana-based DeFi platform Step Finance further dented investor confidence across the sector, the analysts added.

Bitcoin’s recent correction has pushed the cryptocurrency below its estimated production cost, which has historically acted as a "soft price floor," the analysts said. They currently estimate bitcoin’s production cost at around $87,000. If prices remain below this level for an extended period, unprofitable miners could exit the market, which would in turn push production costs lower, the analysts added.

Bitcoin has continued to fall and is down nearly 10% over the past 24 hours, currently trading around $65,600, according to The Block’s bitcoin price page.

Despite the near-term pressure, the JPMorgan analysts see a stronger long-term outlook driven by bitcoin’s evolving role relative to gold.

"The large outperformance of gold vs. bitcoin since last October coupled with the sharp rise in gold volatility has led to bitcoin looking even more attractive compared to gold over the long term," the analysts said. They added that the bitcoin-to-gold volatility ratio has fallen to around 1.5 — a record low — making bitcoin increasingly attractive on a volatility-adjusted basis.

Using this framework, bitcoin’s market capitalization would need to rise to the equivalent of a $266,000 price to match private-sector investment in gold, estimated at roughly $8 trillion excluding central bank holdings, the analysts noted. They stressed that this level is an "unrealistic" target for the current year but said it highlights bitcoin’s long-term upside potential once negative sentiment reverses, and the asset is again viewed as an equally attractive hedge against catastrophic scenarios.

Last November, the analysts outlined an upside case of roughly $170,000 over the next 6–12 months based on bitcoin’s volatility-adjusted comparison to gold. The new target is significantly higher but reflects a longer-term timeframe and follows the analysts’ move last week to raise their long-term gold outlook to $8,000–$8,500.

The current state of the crypto market 

Despite the weakness, liquidations across crypto derivatives markets have been relatively modest compared with last quarter, according to the analysts. Deleveraging in perpetual futures — measured by open interest relative to bitcoin and Ethereum market capitalization — has been less severe than the liquidation wave seen last October. Liquidations by non-native institutional investors in CME bitcoin and Ethereum futures were also smaller than those recorded in the previous quarter, the analysts said.

Meanwhile, exchange-traded fund flows continue to point to broad negative sentiment. Spot bitcoin and Ethereum ETFs have experienced continued outflows, suggesting weakness across both institutional and retail investor segments. Since the Oct. 10 MSCI announcement, Ethereum ETFs have seen roughly three times more outflows than bitcoin ETFs relative to assets under management, highlighting the greater liquidity vulnerability of altcoins, where even modest dollar outflows can have a larger market impact, the analysts said.

Stablecoin supply has also contracted in recent weeks, reinforcing the cautious mood. However, the analysts said the decline should not be interpreted as investors leaving crypto altogether. Instead, the analysts view the contraction "as a natural and delayed reaction to the shrinkage of overall crypto market cap." Historically, the ratio of stablecoins to total crypto market value has tended to mean-revert, meaning a smaller market cap requires less stablecoin collateral in dollar terms, the analysts noted.