Bitcoin's long-held reputation as 'digital gold' has taken a hit in recent months, but JPMorgan analysts see a silver lining: the asset's declining volatility relative to gold could make it more attractive over the long haul. Gold surged over 60% in 2025 on central bank buying and safe-haven flows, while bitcoin struggled into 2026 with repeated monthly losses, lagging even risk assets.
Diverging paths, converging logic
The team led by Nikolaos Panigirtzoglou wrote that digital assets 'came under further pressure over the past week as risk assets and in particular tech came under pressure and as gold and silver, the other perceived hedges to a catastrophic scenario, saw a sharp correction.' The selloff has spread to spot bitcoin and ether ETFs, signaling broad negative sentiment across institutions and retail. Stablecoin supply also contracted, underscoring the bearish mood.
Lower volatility as a long-term edge
Yet JPMorgan still sees a bullish case for bitcoin. The report notes that gold's outperformance since last October came with sharply higher volatility, which actually makes bitcoin 'even more attractive compared to gold.' In a volatility-adjusted framework, if bitcoin matched gold's recent volatility, its price would need to rise to roughly $266,000 to equal the capital allocated to gold. The analysts call this target 'unrealistic for this year' but stress it highlights upside potential 'once negative sentiment is reversed and once bitcoin is again perceived equally attractive to gold as a potential hedge to a catastrophic scenario.'