JPMorgan Predicts Bitcoin Could Soar to $266,000, Outperforming Gold Long-Term

JPMorgan Chase analysts are making a bold long-term call for Bitcoin, projecting its price could eventually reach an astonishing $266,000. Despite current market turbulence and a broad correction in risk assets, the investment bank suggests Bitcoin’s structural appeal, over the long haul, now surpasses even gold.

Navigating Short-Term Headwinds

The cryptocurrency market has recently faced renewed pressure, according to a report released Wednesday by a JPMorgan analysis team led by Managing Director Nikolaos Panigirtzoglou. This downturn mirrors a broader weakening in risk assets, including tech stocks, and has even seen traditional safe havens like gold and silver experience significant pullbacks. Adding to investor caution, a recent hack on the Solana DeFi platform Step Finance resulted in a loss of approximately $29 million, further dampening market sentiment.

Bitcoin, for instance, saw a more than 10% decline in the past 24 hours, trading around $65,000. JPMorgan analysts note that BTC has fallen below its “production cost” threshold of $87,000. Historically, this production cost acts as a “soft bottom.” Sustained prices below this level typically force unprofitable miners to cease operations, eventually lowering the industry’s marginal production cost and establishing a new market equilibrium.

Bitcoin’s Evolving Edge Over Gold

Despite the immediate selling pressure, JPMorgan maintains a relatively optimistic long-term outlook for Bitcoin, primarily due to a significant shift in its “relative positioning” against gold. While gold has notably outperformed Bitcoin since last October, its volatility has also increased. When assessed through the lens of risk-adjusted returns, Bitcoin is now presenting a more compelling investment case.

Crucially, the volatility ratio of Bitcoin relative to gold has dropped to an unprecedented low of approximately 1.5 times. This indicates that for an equivalent unit of risk, Bitcoin’s potential return structure is improving, making it increasingly attractive for sophisticated investors.

The $266,000 Rationale: A Long-Term Vision

JPMorgan’s ambitious $266,000 price target is derived from an asset allocation perspective. If Bitcoin’s market capitalization were to eventually match the total value of privately held gold (estimated at $8 trillion, excluding central bank reserves), its fair price would indeed be $266,000.

Analysts emphasize that this is a long-term theoretical target price and not an expectation for the current year. However, it underscores their belief that once market panic subsides, Bitcoin will reclaim its status as an “extreme risk safe-haven asset” on par with gold, offering substantial long-term upside potential. This updated projection marks a significant increase from JPMorgan’s November estimate of $170,000 for Bitcoin. Concurrently, they have also raised their long-term gold target price to $8,000-$8,500 per ounce.

Broader Market Signals: A Nuanced View

Even amidst widespread crypto market sell-offs, JPMorgan highlights that the scale of liquidations in the cryptocurrency derivatives market is considerably lower than the severe deleveraging seen in the previous quarter. Deleveraging in perpetual contracts, measured against Bitcoin and Ethereum market cap, is far less pronounced than the October liquidation wave. Similarly, forced liquidations among non-native crypto institutions in CME Bitcoin and Ethereum futures have been more moderate than in the prior quarter.

However, spot ETF fund flows continue to reflect a predominantly bearish sentiment. Ethereum ETFs, in particular, have witnessed outflows three times larger than those from Bitcoin ETFs, suggesting that altcoins face greater selling pressure during periods of tightening liquidity.

Furthermore, a recent decline in stablecoin supply has reinforced a cautious market atmosphere. JPMorgan, however, advises against interpreting this as a wholesale investor exodus. Analysts explain that the stablecoin supply as a proportion of total crypto market capitalization tends to exhibit mean reversion over the long term. When the overall market shrinks, the required amount of USD stablecoin collateral naturally decreases—a lagging reaction rather than a direct signal of collapsing investor confidence.