Despite a recent pullback, gold experienced a notable surge last week. In contrast, Bitcoin did not keep up with gold’s rally and instead followed its downward trend, slipping below the $70,000 mark.
This divergence reignited the ongoing debate between Bitcoin and gold as investment assets. However, JPMorgan has stepped in to provide clarity on the matter.
In its latest analysis, JPMorgan declared that Bitcoin holds greater appeal as a long-term investment compared to gold.
Walter Bloomberg reported that Nikolaos Panigirtzoglou, JPMorgan’s global markets strategist, emphasized that after gold’s sharp price increase, Bitcoin now appears more attractive over the long haul.
“Gold's strong outperformance against Bitcoin since last October combined with heightened volatility in gold prices has actually enhanced Bitcoin's appeal for long-term investors,” he explained.
The bank pointed out that following recent declines, Bitcoin’s price dropped well below its historically important production cost threshold of $87,000—a level which traditionally acts as crucial support—indicating an unusually low valuation by historical standards.
Additionally, JPMorgan highlighted that the volatility of Bitcoin relative to gold has reached an all-time low. This suggests increased stability for BTC and strengthens its potential for sustained growth over time.
Panigirtzoglou further noted that current market movements have pushed the ratio of Bitcoin-to-gold volatility down to a record 1.5 level—signaling that Bitcoin is undervalued at present.
Based on this volatility-adjusted perspective, JPMorgan argued that for bitcoin’s market capitalization to align with private sector investments in gold (estimated around $8 trillion excluding central banks), it would need to rise dramatically—to approximately $266,000 per bitcoin.
Nonetheless, Panigirtzoglou admitted this figure is unlikely to be achieved within this year alone but remains a reasonable target over time once negative sentiment fades and bitcoin gains recognition comparable to gold as a hedge against catastrophic economic scenarios.
*This content does not constitute financial advice.*