Bitcoin Diverges From Gold, but JPMorgan Sees Major Future Potential
Bitcoin’s reputation as “digital gold” has come under pressure after the cryptocurrency sharply diverged from traditional safe-haven assets, but JPMorgan analysts argue the gap may ultimately strengthen the digital asset’s long-term outlook.
In a recent research note, analysts led by Nikolaos Panigirtzoglou said gold’s strong rally throughout 2025 contrasted sharply with Bitcoin’s struggles heading into 2026. The report highlighted that gold surged more than 60% last year, driven largely by persistent central-bank buying and a broad flight-to-safety trend among investors.
Gold price (Source: TradingView)
Bitcoin, by comparison, has recorded repeated monthly declines and underperformed several major risk assets as market sentiment deteriorated. The widening gap between the two assets, the analysts said, reflects a weakening perception of Bitcoin as a hedge against market turmoil.
Safe-Haven Narrative Under Pressure
According to JPMorgan, digital assets have come under renewed pressure as global markets turned risk-averse. Technology stocks weakened, while gold and silver—traditionally seen as protection against extreme economic scenarios—also experienced sharp corrections in recent sessions.
The downturn spread across the broader crypto market, including spot Bitcoin and Ethereum exchange-traded funds. JPMorgan said these funds have seen outflows, signaling negative sentiment among both institutional and retail investors.
The bank also pointed to a contraction in stablecoin supply, which it described as another sign of cooling demand across digital-asset markets.
Stablecoins are often viewed as a proxy for liquidity and trading activity within the crypto ecosystem, meaning a shrinking supply can reflect declining participation.
Taken together, the trends suggest that Bitcoin has lost some of its perceived role as a hedge during periods of financial stress, at least in the near term.
Volatility Gap Creates Long-Term Upside Case
Despite the near-term weakness, JPMorgan maintains a constructive long-term outlook for Bitcoin relative to gold.
The analysts noted that gold has outperformed Bitcoin since October of last year, but that outperformance has come with significantly higher volatility. In their view, this dynamic could actually make Bitcoin more attractive over time.
In a theoretical comparison, JPMorgan estimated that if Bitcoin were to match the volatility profile currently seen in gold, its price would need to climb to roughly $266,000 to align with the scale of investment flowing into the precious metal.
The bank acknowledged that such a level is unrealistic in the short term, particularly within the current year. However, the exercise illustrates the potential upside for Bitcoin if investor sentiment improves and the cryptocurrency regains its status as a credible hedge against extreme economic scenarios.
The analysts said the relatively lower volatility currently seen in Bitcoin could eventually become a positive factor. Once negative sentiment reverses and Bitcoin is once again perceived as comparable to gold as a defensive asset, the cryptocurrency could see renewed demand from institutional investors.
Short-Term Headwinds, Long-Term Narrative
For now, Bitcoin remains tied closely to broader risk-asset trends, particularly the performance of technology stocks. That relationship has weighed on the asset during recent market downturns, contributing to ETF outflows and weaker sentiment across the digital-asset sector.
However, JPMorgan’s analysis suggests the long-term narrative around Bitcoin as a hedge against catastrophic financial scenarios has not disappeared. Instead, it may simply be overshadowed by current market conditions.
If that perception shifts and institutional capital returns, the analysts argue, Bitcoin could once again narrow the gap with gold—potentially unlocking significant upside over time.
The report ultimately frames the divergence between Bitcoin and traditional safe havens not as a sign of structural weakness, but as a temporary phase that could set the stage for renewed growth once sentiment stabilizes.
