JPMorgan sees bitcoin support at $94,000, keeps $170,000 upside case intact

Bitcoin’s downside from current levels appears to be “very limited,” according to JPMorgan analysts, who see its support price at around $94,000.

The analysts, led by managing director Nikolaos Panigirtzoglou, said in a Wednesday note that bitcoin’s estimated production cost — which has historically acted as a floor or support price — has risen to roughly $94,000 from a recent estimate of about $92,000.

They said the steep rise in bitcoin network difficulty over the past couple of months — the amount of computing power required to mine the same number of blocks — has sharply increased estimated production costs. The ratio of bitcoin’s price to its production cost now sits just above 1.0, near the low end of its historical range, the analysts said.

“The bitcoin production cost has empirically acted as a floor for bitcoin, so a $94,000 production cost implies very limited downside to the current bitcoin price” of about $102,300, the analysts wrote.

At the same time, the analysts reiterated last week’s 6–12 month upside projection of about $170,000, based on bitcoin’s volatility-adjusted comparison to gold. They said bitcoin currently consumes around 1.8 times more risk capital than gold. On that basis, its market capitalization of roughly $2.1 trillion would need to rise by about 67% — "implying a theoretical bitcoin price of close to $170,000" — to reach parity with the roughly $6.2 trillion of private-sector investment in gold via ETFs, bars, and coins.

Last month, in a similar analysis, the analysts said bitcoin appeared significantly undervalued relative to gold, implying potential upside toward $165,000 by year-end. However, “given the recent liquidations and given how negative sentiment is at the moment, it would not be realistic to expect this priceby year's end,” JPMorgan's Panigirtzoglou told The Block.

In August, the analysts made a comparable projection, estimating bitcoin could reach around $126,000 by year-end. Bitcoin later hit an all-time high of over $126,200 on Oct. 6 before the record liquidation event on Oct. 10.