JPMorgan: Bitcoin’s Pain Threshold at $94,000

JPMorgan’s latest analysis, detailed in research reported by The Block, establishes $94,000 as Bitcoin’s fundamental support level based on updated mining production costs. The bank’s analyst team, led by Nikolaos Panigirtzoglou, calculates that the all-in cost to mine one bitcoin has risen from approximately $92,000 to roughly $94,000 as network difficulty has surged in recent months. This increase in computational requirements forces miners to deploy more hashpower per block, effectively lifting the marginal cost per coin.

The framework builds on JPMorgan’s historical approach to Bitcoin valuation, where the bank has consistently found that ‘the bitcoin production cost has empirically acted as a floor for bitcoin.’ This relationship means that as mining costs increase, the fundamental support level for Bitcoin’s price mechanically rises accordingly. With Bitcoin trading at $97,505 at the time of the analysis, the ratio of spot price to production cost sits just above 1.0, placing it near the lower end of its historical range.

JPMorgan emphasizes that the $94,000 level represents more than just a precise price point—it’s a statistically grounded region where downside risk becomes compressed. As the price approaches this production cost threshold, miners’ incentives to continue selling into market weakness deteriorate, creating natural support. The thin operating margins at current levels mean there’s limited room for extended moves below the modeled cost without triggering significant stress throughout the mining sector.

While establishing a clear downside boundary, JPMorgan maintains a substantially more optimistic medium-term outlook, reiterating a 6-12 month upside case around $170,000 per bitcoin. This target derives from a volatility-adjusted comparison with gold, a methodology the bank has consistently applied in its cryptocurrency research. According to The Block’s reporting, JPMorgan’s analysts estimate that Bitcoin currently ‘consumes’ approximately 1.8 times more risk capital than gold, yet maintains a significantly smaller market capitalization.

The numbers reveal a substantial valuation gap: Bitcoin’s market capitalization stands at roughly $2.1 trillion compared to approximately $6.2 trillion in private-sector gold investment through ETFs, bars, and coins. To close this gap on a volatility-adjusted basis, JPMorgan calculates that Bitcoin’s market cap would need to increase by about 67%, ‘implying a theoretical bitcoin price of close to $170,000.’ This analysis, as reported by MarketWatch in separate coverage, concludes that post-October deleveraging left Bitcoin ‘very cheap to gold’ on a risk-adjusted basis.

This $170,000 projection represents a refinement of JPMorgan’s earlier forecasts. Last month, the same research team argued that Bitcoin appeared significantly undervalued relative to gold, implying upside toward approximately $165,000 by year-end. However, Panigirtzoglou has since adjusted the timing, telling The Block that ‘it would not be realistic to expect this price target by year’s end’ given recent liquidations and persistently weak market sentiment.

JPMorgan’s current analysis fits within a broader framework the bank has been developing publicly throughout 2024. The research team’s August projection suggested Bitcoin could reach around $126,000 by year-end—a forecast that proved prescient when Bitcoin printed an all-time high above $126,200 on October 6. However, a record liquidation event on October 10 abruptly reset market positioning, demonstrating the volatility that characterizes cryptocurrency markets.

The consistency in JPMorgan’s methodology is notable across these various projections. The bank has repeatedly returned to production cost as a reliable indicator of Bitcoin’s price floor throughout market cycles, while simultaneously employing gold comparisons for upside valuation. As summarized in The Block’s coverage, the mechanical exercise of comparing Bitcoin to gold ‘thus implies significant upside for bitcoin over the next 6-12 months,’ with fair value consistently clustering near the $170,000 mark across different analyses.

What distinguishes the latest research, as relayed by The Block, is the explicit identification of $94,000 as the ‘pain threshold’ where mining economics begin to force the market to confront its fundamental constraints. This dual approach—establishing both a clear downside boundary and substantial upside potential—provides investors with a comprehensive framework for understanding Bitcoin’s risk-reward profile in the current market environment.