"Bitcoin fell more than 20% last month after hitting an all-time high of $126,000, a drop that JPMorgan's Nikolaos Panigirtzoglou attributed to heavy deleveraging in futures markets and fallout from a $128 million hack of the DeFi platform Balancer. He noted that the ratio of open interest in perpetual futures to Bitcoin's market capitalization has since returned to average levels, suggesting that "excess leverage has largely been cleared.""
"On a volatility-adjusted basis, Bitcoin is now trading at a discount compared to gold. JPMorgan's analysis found that as gold's price surged above $4,000 per ounce-bringing higher volatility-Bitcoin's own volatility subsided. To reach parity with gold's $6.2 trillion in private-sector investment on a risk-adjusted basis, Bitcoin's price would need to climb roughly two-thirds, to 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 wrote."
Bitcoin plunged over 20% in October after reaching an all-time high near $126,000, driven by heavy deleveraging in futures markets and a $128 million hack of the Balancer DeFi platform. The ratio of open interest in perpetual futures to Bitcoin market capitalization has returned to average levels, indicating most excess leverage has been cleared. ETF outflows were modest compared with prior inflows, creating a more stable backdrop. On a volatility-adjusted basis Bitcoin now trades at a discount to gold; achieving risk-adjusted parity with gold's $6.2 trillion private investment implies a Bitcoin price near $170,000. Current price is about $101,977.
Read at Bitcoin Magazine
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