JP Morgan analysts assert that Bitcoin is positioned for greater growth than gold, driven by rising institutional interest and recent market developments. Bitcoin has rallied near its all-time highs, boosted by risk appetite among investors and maturing derivatives markets resulting from key acquisitions. Analysts anticipate continued competition between the two assets, with Bitcoin’s crypto-specific catalysts expected to outpace gold in the latter half of the year.
In a detailed report released on Thursday, JP Morgan analysts projected that Bitcoin possesses greater growth potential than gold, driven primarily by several key factors, including increasing institutional interest and specific crypto catalysts. Bitcoin, currently hovering around $104,000, is a mere 5% short of its all-time high. The recent rally in the crypto market appears to be driven by investors returning to risk assets, with Bitcoin leading this trend.
Analysts highlighted the role of corporate treasury allocations and supportive legislation that facilitates state investments in cryptocurrency. They noted that recent acquisitions, like Coinbase’s buyout of Deribit and Kraken’s purchase of NinjaTrader, indicate a maturing derivatives market. Such developments are expected to enhance traditional investors’ trust in crypto, as the sector comes under stricter regulations in the US and EU.
JP Morgan expects the ongoing competition between Bitcoin and gold to continue through the end of the year. The report, led by Nikolaos Panigirtzoglou, suggests that Bitcoin will likely see more upward movement due to crypto-specific drivers, outpacing gold during this period. Interestingly, while Bitcoin has been touted as a safe-haven asset, it has often behaved more like a risk-on investment, correlating closely with stock market trends rather than standing apart.
The evolving derivatives market in cryptocurrency has also played a significant role in this projection. Recent developments, such as Gemini securing a licence to operate as a derivatives provider in Europe, are viewed as milestones that could contribute to the confidence of institutional investors. Despite the optimism around Bitcoin, there remains skepticism regarding gold. Michael Petch, the CEO of digital precious metals platform Argo, mentioned that gold could still experience price increases depending on future tariff negotiations with China.
Both assets have seen steady increases over the past year, responding to rising inflation fears and macroeconomic uncertainties, but Bitcoin’s performance has significantly outshone that of gold during this timeframe. According to K33 Research, the net inflows into Bitcoin ETFs have surpassed those into gold ETFs since December of last year. As of now, gold is trading at approximately $3,230, a drop from its April peak of $3,500, while Bitcoin was valued just below its January peak of nearly $109,000, currently at about $103,800.
