Why JP Morgan Calls Bitcoin a "Degraded Transaction"

Hi, I'm John. Today I'd like to explain in simple terms what JPMorgan calls Bitcoin's "debasing trade." If you're just starting to get interested in virtual currencies, the views of these major financial institutions should be helpful.

Recently, as Bitcoin's price has skyrocketed, major banks like JPMorgan have positioned it as a "trade against debasement." This means that Bitcoin is gaining attention alongside gold as a hedge against inflation and currency dilution. This topic is important now because, amid rising geopolitical risks and economic uncertainty, we are seeing investors shift from traditional assets to digital assets. Let's start by reviewing the basics of this concept so you can understand it with confidence.

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Table of Contents

What is debasment trading?

Debasement trading is a strategy in which investors move funds into assets like gold and Bitcoin to protect against the risk of currency debasement. Simply put, investors choose these assets as a defense against the risk that rising inflation and government budget deficits could dilute the value of money. JPMorgan's analysis notes that Bitcoin has emerged as a key player in this trade.

In the past, gold was the go-to hedge. Now, Bitcoin has been dubbed "digital gold" and is being traded alongside gold in debasing trades. Going forward, this trend is likely to intensify as long as geopolitical tensions persist.

Background to JPMorgan's analysis

A JPMorgan report states that Bitcoin is undervalued compared to gold and could reach $165,000 by the end of 2025. This is based on an analysis dated October 2, 2025. The background to this is interest rate cuts by the US Federal Reserve, continued inflation, and rising geopolitical risks.

While Bitcoin was once considered a speculative asset, it has now gained the trust of institutional investors after 17 years of solid performance. The positive views of these major banks will help the market mature.

The relationship between Bitcoin and gold

Both Bitcoin and gold have finite supplies and act as hedges against currency devaluation. JPMorgan's analysis suggests that Bitcoin's market value is lower than that of gold, leaving it open to potential upside. For example, the debasing trade is also behind Bitcoin's price reaching new highs of over $125,000 as of October 2025.

Looking at the historical rise in gold prices, Bitcoin is currently showing a similar movement. It is expected that capital inflows into both assets will continue, leading to a mutually complementary relationship. However, caution is required as Bitcoin is highly volatile (the magnitude of price fluctuations).

Latest news and price trends

An October 4, 2025, CryptoSlate article stated that JPMorgan labeled Bitcoin a debasing trade due to uncertain macroeconomic and geopolitical conditions. An October 2, 2025, article in The Block stated that Bitcoin was undervalued relative to gold and set a target price of $165,000.

Recent news reports indicate that Bitcoin hit a new high of $125,700 over the weekend. This trend is currently in line with the rise in gold prices, and it is expected to move towards $130,000 in the future. However, markets are volatile, so it's best to keep an eye on the latest developments.

How to deal with it as an investor

If you're interested in debasing trading, it's important to understand the risks. Bitcoin offers the potential for high returns, but there's also the risk of a sudden price drop. Invest at your own risk and with only spare capital. Also, be aware of changes in regulations and security threats, and choose a reputable exchange.

Here are some practical tips to keep in mind:

First, buy a small amount of Bitcoin and observe market movements.
Consider gold or Bitcoin ETFs (exchange-traded funds, investment products that can be traded like stocks) to diversify your investments.
Check multiple news sources and use analysis like that of JPMorgan to make your decision.
Strengthen the security of your wallet (cryptocurrency storage) and be sure to set up two-factor authentication.

Feel free to try these out and you'll gain a deeper understanding, but please note that I don't offer investment advice, so please use your own judgment.

Future outlook and points to note

Going forward, debasing trades will become more established and Bitcoin will play an even larger role, especially as global debt and central bank policies continue. However, we must not forget the risks of increased regulation and cyberattacks.

In terms of security, always keep up to date with the latest information and beware of phishing scams. Regarding regulations, check the rules of each country and make sure to file your tax returns.

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In summary, JPMorgan's term "debasing trade" symbolizes the intrinsic value of Bitcoin. I believe that the perspective of such a major institution is a good sign that the adoption of virtual currencies will accelerate. Everyone should learn a little at a time and use them wisely.

This article has been compiled and fact-checked by the author, based on the following original articles and public information:

How to choose and compare cryptocurrency exchanges for beginnersclick here .

Why JP Morgan Calls Bitcoin a "Degraded Exchange": Latest Analysis