The relative appeal of Bitcoin compared with gold has strengthened notably in recent months, according to a new assessment from JPMorgan. After a prolonged period in which gold outperformed digital assets, analysts at the investment bank now argue that Bitcoin offers a more compelling risk-adjusted opportunity for long-term investors.
Nikolaos Panigirtzoglou, JPMorgan’s leading quantitative strategist, highlighted that the combination of gold’s strong rally and Bitcoin’s correction has reshaped the investment landscape. In his view, the divergence has made Bitcoin look undervalued rather than weakened.
Since late last year, gold has delivered impressive returns as investors sought safety amid geopolitical tension and macroeconomic uncertainty. Bitcoin, meanwhile, struggled with tightening liquidity and regulatory concerns. This gap widened the performance spread between the two assets.
However, JPMorgan believes this imbalance is now working in Bitcoin’s favor. As gold volatility increased and Bitcoin stabilized, the digital asset began to look more attractive on a relative value basis. Investors comparing both markets are starting to view Bitcoin as a potential growth alternative rather than a speculative outlier.
One of the key metrics used by JPMorgan is the Bitcoin-to-gold volatility ratio, which recently fell to 1.5 – the lowest level on record. A lower ratio indicates that Bitcoin’s price swings are becoming less extreme compared with gold, improving its profile for institutional portfolios.
From a portfolio construction perspective, this trend suggests that allocating to Bitcoin no longer represents the same level of risk as in previous cycles. The bank argues that the asset is gradually maturing into a more stable store of value.
Despite the more optimistic long-term view, short-term conditions remain challenging. The broader cryptocurrency market has faced weeks of turbulence as risk assets weakened globally. An additional blow came after Step Finance on the Solana network was hacked for $26 million, an event that further undermined confidence.
Such incidents have reinforced concerns about security and infrastructure within the digital-asset ecosystem. Retail traders in particular reacted defensively, reducing exposure and moving capital to safer instruments.
Another worrying signal is the persistent withdrawal of funds from spot Bitcoin ETFs. JPMorgan notes that both institutional and retail investors have been redeeming shares, reflecting a generally negative mood toward the asset class.
ETF flows are often seen as a barometer of mainstream adoption. The ongoing outflows suggest that many large investors remain cautious, waiting for clearer macro signals before returning to the market.
Even with the sell-off, JPMorgan observed that the scale of liquidations was more modest than in the previous quarter. Deleveraging in perpetual futures and CME Bitcoin and Ethereum contracts occurred in an orderly manner rather than through panic unwinds.
This indicates that speculative excesses have already been reduced and that the market structure is healthier than during earlier crashes. Lower leverage could pave the way for a more sustainable recovery.
The bank also addressed the ongoing contraction of stablecoin supply, which many commentators interpreted as capital fleeing crypto altogether. JPMorgan disagrees, arguing that the decline is a delayed and natural response to the shrinking total market capitalization rather than evidence of mass investor exit.
According to Panigirtzoglou, stablecoin trends should be read in context and do not necessarily signal structural damage to the ecosystem.
A central pillar of JPMorgan’s thesis is the relationship between Bitcoin’s price and its estimated production cost, currently around $87,000. The recent correction pushed market prices well below this level.
Historically, the production cost has acted as a soft floor for Bitcoin. When prices drop significantly under this threshold, mining economics tighten and selling pressure tends to ease, often preceding a rebound.
This model does not guarantee an immediate rally, but it supports the argument that Bitcoin is fundamentally undervalued at current levels.
JPMorgan conducted a thought experiment comparing private-sector investment in gold with Bitcoin on a volatility-adjusted basis. The analysis concluded that Bitcoin’s market capitalization would need to imply a price of roughly $266,000 to reach parity with gold holdings.
The bank stresses that this is not a near-term price target. Instead, it illustrates the scale of potential upside if Bitcoin continues to gain acceptance as “digital gold” within diversified portfolios.
For such a scenario to materialize, broader institutional participation is essential. Pension funds, wealth managers, and sovereign investors would need to treat Bitcoin as a strategic asset rather than a speculative trade.
The gradual normalization of volatility and the development of regulated ETF products are seen as important steps toward that future.
While the outlook is improving, JPMorgan remains cautious about several risks:
Regulatory uncertainty in major markets could restrict adoption.
Security breaches continue to damage confidence.
Macroeconomic tightening may reduce appetite for alternative assets.
Competition from other digital assets could dilute Bitcoin’s dominance.
Investors are advised to treat Bitcoin as part of a diversified strategy rather than a standalone bet.
JPMorgan’s latest analysis marks an important shift in the debate over Bitcoin vs gold. After months in which gold clearly led the race, the balance is beginning to tilt back toward digital assets.
Key takeaways include:
Bitcoin now looks more attractive on a risk-adjusted basis after the recent divergence.
ETF outflows and weak sentiment remain short-term headwinds.
Prices below production cost suggest limited downside historically.
Long-term parity with gold would imply substantial upside potential.
For long-horizon investors, the message is clear: Bitcoin may be entering a new phase where its role as a strategic asset becomes harder to ignore. Whether this transformation unfolds will depend on macro stability, regulatory clarity, and the return of institutional confidence.
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