Why is Jito's JTX Undervalued Despite Capturing User Traffic?

Unveiling Jito's new valuation logic: How JTX is reshaping the business, with a bullish base scenario suggesting a 57% upside and a probability-weighted target soaring by 267%.

Written by: ake Koch-Gallup Sam Schubert

Compiled by: AididiaoJP, Foresight News

Since the launch of JTX on July 14, we have been considering how to price JTO. This product is reshaping Jito's business model: it is no longer just a price taker in the Solana block space but is starting to price user traffic. Our base scenario implies a 57% upside, while the probability-weighted target points to a potential increase of 267%. Meanwhile, the crypto market has seen a comprehensive pullback, with only the crypto mining sector standing out, buoyed by a wave of AI data center transactions.

Looking at the longer term, one trend remains prominent: in the past week, the crypto mining sector surged by 27.0%, significantly outperforming all other crypto sectors. Following closely are DEX (+4.6%), the Bittensor ecosystem (+4.3%), and the Ethereum ecosystem (+3.9%). In the same period, the broader stock market remained nearly flat.

This rally has been primarily driven by a series of AI infrastructure announcements, changing investor perceptions of the valuation logic for Bitcoin mining companies. On July 20, Hut 8 announced a new 15-year, $9.8 billion lease for its Beacon Point facility, covering 352 megawatts of power. The agreement doubles the contracted capacity to 704 megawatts, raising the total base contract value to $19.6 billion. On the same day, IREN signed an additional $2.8 billion AI cloud contract, raising its year-end run rate target from $3.7 billion to over $4 billion, with about 85% of the capacity contracted to clients like Microsoft, Nvidia, and Perplexity.

The market reacted swiftly. In the past week, Greenidge rose by 59.6%, followed closely by Cipher (+51.4%), Hut 8 (+31.4%), Riot (+30.4%), and CleanSpark (+22.9%). The common thread is that investors increasingly view these companies as owners of scarce power and data center infrastructure, rather than just Bitcoin miners. As long as AI computing demand continues to exceed supply, this narrative is likely to remain a major catalyst for the sector, even as Bitcoin itself remains in a range-bound oscillation.

Jito's JTX Valuation

Today, we delve deeper into how to value JTO. The progress of JTX is redefining what this company is all about. The market still prices it as a backend infrastructure for Solana—a price taker reliant on block space activity—while JTX (launched on July 14) has effectively turned it into a price setter for user traffic. Our buy logic focuses on whether Jito can truly capture this traffic, rather than a rebound in traditional business.

Although it is still early for execution data on JTX, positive signals have already emerged. Since its launch, over 77,000 transactions have occurred, with the median transaction price deviating from the oracle midpoint by only 5.5 basis points, and 77.6% of transactions falling within 25 basis points, with 29.1% even outperforming the oracle quotes. The quality of transactions is highly correlated with liquidity: the median deviation for SOL is 3.9 basis points, while JitoSOL is only 0.5 basis points, and long-tail thin liquidity assets are wider. The advantages brought by BAM are not yet apparent: BAM dominates blocks with 4.6 basis points, while other blocks are at 4.8 basis points.

This trading structure has formed because Jito deliberately sacrificed short-term revenue for the optimization of Solana's long-term market structure—shutting down predatory MEV traffic and prioritizing BAM, which directly reduced the previously high-profit Jito tip revenue.

The model remains conservative regarding traditional business: it does not assume tip revenue returns to peak levels, does not assume JitoSOL LST recovers, and does not assume BAM fully monetizes. The base scenario instead assumes that JTX captures 15% of Solana DEX trading volume by Q2 2027, generating a net income of $5.8 million per quarter and total revenue of $8.2 million, annualizing to about $32.7 million, with JTX accounting for approximately 72%. This implies a market-to-sales ratio of less than 15 times, adjusted for treasury, based on the annualized revenue for Q2 2027.

Historical experience shows this is cheap: even with declining revenue, the average market-to-sales ratio for backend infrastructure businesses since early 2025 has remained around 38 times. Assigning a conservative 30 times valuation to the base scenario annualized revenue corresponds to a JTO price of $1.18, implying about 57% upside. For a growing business with a superior frontend economic model, a 30 times valuation is not excessive, especially compared to that of a shrinking business enjoying 38 times.

The scenario range is quite broad. The optimistic scenario (40% probability) assumes JTX captures 25% market share, granting a 45 times valuation, corresponding to a price of $5.31, a 600% increase; the pessimistic scenario (10% probability) assumes market share stagnates at 5%, with the market-to-sales ratio dropping to a commoditized 15 times, corresponding to $0.36, a 52% decline. The weighted target price across the three scenarios is $2.75, implying about 267% upside relative to the current price of approximately $0.75. The valuation is highly sensitive to Solana DEX trading volume, and our weighting leans towards the optimistic side because we believe tokenized stocks and real-world assets will scale on-chain, simultaneously boosting trading volume and JTX's market share.

JTX also clarifies the value capture of JTO: it is expected that 80% of its revenue will be used for buybacks. In the base scenario, approximately $8.6 million will be repurchased over the next 12 months, retiring about 1.5% of the supply adjusted for treasury (optimistic scenario about 5.7%). The flywheel is still small in scale but will be directly amplified with the success of JTX.

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