Strategists indicate that Bitcoin seems to be undervalued when compared to gold, particularly after a significant sell-off in October that was fueled by leveraged liquidations and overall market chaos. Bitcoin experienced a significant decline of over 20% last month, following its peak at an all-time high of $126,000. This downturn was linked by Nikolaos Panigirtzoglou to substantial deleveraging in the futures markets, alongside the repercussions of a $128 million hack affecting the DeFi platform Balancer. He pointed out that the ratio of open interest in perpetual futures to Bitcoin’s market capitalization has now reverted to average levels, indicating that “excess leverage has largely been cleared.” Panigirtzoglou noted that ETF outflows have been modest when compared to previous inflows, indicating a more stable market backdrop. “Most of the deleveraging activity is now behind us,” he stated, noting that the futures open interest ratio continues to be a crucial indicator for short-term price direction.
Currently, Bitcoin is trading at a discount relative to gold when adjusted for volatility. According to analysis, as gold’s price soared past $4,000 per ounce—resulting in increased volatility—Bitcoin’s volatility, in contrast, diminished. In order to achieve parity with gold’s impressive $6.2 trillion in private-sector investment on a risk-adjusted basis, Bitcoin’s price would have to surge approximately two-thirds, landing at around $170,000. “Having been $36,000 too high compared with gold at the end of last year, Bitcoin is now around $68,000 too low,” Panigirtzoglou stated. As leverage stabilizes and volatility diminishes, JPMorgan identifies potential for “significant upside” in the coming six to twelve months, provided that current conditions remain unchanged—an outlook that may enhance Bitcoin’s attractiveness as a digital counterpart to gold within investor portfolios.
Bitcoin is presently valued at $101,977 following a volatile October. Bitcoin started October with strong bullish momentum, reaching a new all-time high of around $125,000–$126,000 on October 6. However, that euphoria was fleeting. Following the peak, Bitcoin faced significant pressure as a staggering liquidation exceeding $19 billion in perpetual futures contracts intensified the unwind. Macroeconomic jitters — trade tensions, central-bank ambiguity, and risk-asset weakening — intensified the correction. The broader risk-off sentiment across global markets further amplified the decline in digital assets, even as fundamentals remained relatively steady.
By the end of the month, Bitcoin marked its first losing October since 2018, declining approximately 4%–5% overall and experiencing one of its most significant October downturns on record. Despite the recent decline, the year-to-date outlook stayed positive — albeit not as enthusiastic as some bulls had anticipated. The current setup, with Bitcoin trading at a considerable discount to gold, could signal a potential rebound phase as speculative leverage normalizes. JPMorgan’s outlook underscores that Bitcoin’s long-term positioning as “digital gold” remains intact, suggesting the asset could regain momentum once macro uncertainty subsides and liquidity conditions improve.