JPMorgan Highlights Strategy's Role in Bitcoin's Path to $170K
JPMorgan reports that Bitcoin's near-term direction is more influenced by Strategy, the largest corporate holder of BTC, and its balance-sheet resilience than by miner behavior, according to a report led by Nikolaos Panigirtzoglou.
Two main forces currently weigh on Bitcoin: a decline in network hashrate and mining difficulty, and increasing market focus on Strategy's ability to avoid selling its Bitcoin during the downturn.
High-cost miners have capitulated as hashrate falls; production costs stand at an estimated $90,000 per BTC, down from $94,000, based on $0.05/kWh electricity. Every $0.01/kWh price change adds roughly $18,000 to production costs for higher-cost miners, per Glassnode data. With Bitcoin near $92,000, miners' selling pressure persists due to squeezed profits, prompting some high-cost producers to liquidate BTC to remain solvent.
Strategy's enterprise-value-to-BTC holdings ratio is 1.13, indicating limited risk of forced sales. The company has created a $1.44 billion reserve through at-the-market equity sales, sufficient to cover dividends and interest expenses for at least 12, potentially 24 months.
Although Strategy's Bitcoin accumulation has slowed, its November purchase of 8,178 BTC brings total holdings to about 650,000 BTC, with a basic market cap near $54 billion and an enterprise value around $69 billion, according to CryptoQuant.
The MSCI index risk includes a potential exclusion of Strategy that could trigger approximately $2.8 billion in passive outflows, risking up to $8.8 billion if other index providers follow suit. If Strategy remains in indices, a rebound toward pre-October levels is possible for both Strategy and Bitcoin.
Perpetual futures deleveraging appears largely complete, and Bitcoin's volatility relative to gold has improved, supporting a longer-term risk-adjusted appeal.
JPMorgan's volatility-adjusted BTC-to-gold model implies a theoretical Bitcoin price near $170,000 over the next 6 to 12 months if market conditions stabilize, which is about $68,000 above the current price.
