In a new report, banking giant JPMorgan has weighed in on the long-running debate between Bitcoin and gold as investment assets, concluding that Bitcoin (BTC) is the more attractive long-term vehicle. The analysis comes amid a period of market divergence where gold recently surged while Bitcoin failed to keep pace, subsequently falling below the $70,000 level.
JPMorgan global markets strategist Nikolaos Panigirtzoglou stated that "Gold’s significant outperform against Bitcoin since last October, coupled with the sharp increase in gold volatility, has made Bitcoin even more attractive than gold in the long term." The bank's assessment hinges on a key metric: the Bitcoin-gold volatility ratio has recently dropped to a record low of 1.5, signaling increased stability for BTC and suggesting it is currently undervalued.
The report highlights a significant technical level, noting that Bitcoin's recent decline has pushed it well below its historically significant cost-of-production level of $87,000, which has traditionally served as a critical support zone. This positioning represents a historically low valuation point for the cryptocurrency.
JPMorgan also presented a long-term valuation framework. On a volatility-adjusted basis, the bank argues that Bitcoin's market capitalization would need to rise to $266,000 per coin to match the private sector's investment in gold (approximately $8 trillion, excluding central bank holdings). While analyst Panigirtzoglou acknowledged this price target is unrealistic for the current year, he analyzed that the target is logical. He believes Bitcoin has the potential to reach that level when current negative market sentiment dissipates and BTC is perceived as equally attractive as gold for hedging against a "doomsday scenario."
