- JPMorgan believes Bitcoin may be having a hard time keeping up with its “digital gold” status amid the bearish market sentiment.
- Analysts from the financial institution said that gold demand has significantly spiked as BTC price continues to lose momentum.
Bitcoin (BTC) is back around the $81K range after its failure to hold the $88K line this Thursday evening. The movement of the world’s largest cryptocurrency asset by market cap continued to get hampered by the overly cautious sentiment gripping the market as the Crypto Fear & Greed Index once again touched the “Extreme Fear” zone at 25.
One of the primary catalysts for Bitcoin’s stagnation was President Donald Trump’s shock and awe approach in his tariff wars. Today notably marked the implementation of his reciprocal tariffs that are definitely causing exporters to the US scrambling.
Bitcoin Losing Its Edge Against Gold
Adding salt to the wound was JPMorgan’s latest commentary about Bitcoin. According to its analysts, the current market condition is putting pressure on BTC’s narrative as “digital gold.” Meanwhile, gold has seemingly benefited from economic uncertainty with its stronger demand.
“Bitcoin’s volatility and correlation with equities raises questions over its ‘digital gold’ narrative,” said Nikolaos Panigirtzoglou, managing director of JPMorgan, and his team to The Block. “Looking forward, we see gold continuing to rise as the major beneficiary of the debasement trade.”
The analysts explained that gold has accelerated its pace significantly since January. Its rise above $3,100 underscored the intensification of the debasement trade, heavily favoring the precious metal.
On the other hand, despite Bitcoin touching a new all-time high at $109K in January, it has gone down considerably since then. The analysts claimed that investors are also gradually moving away from it due to its high volatility and risk, which aligns it with technology stocks.
Nonetheless, the JPMorgan analysts believe that Bitcoin is still well above expectations based on its estimated production cost of $62K and volatility-adjusted value of $71K.
Bitcoin Critic Peter Schiff Surprised
Interestingly, Peter Schiff, a veteran gold investor and Bitcoin critic, recently acted surprised at the price performance of BTC. A couple of hours ago, he said, “I’m surprised that Bitcoin held up so well today.”
For the founder of SchiffGold, Bitcoin was only down by 5.7%, which was only a “bit worse” than Nasdaq and a notch better than the Russel 2000 Index. He noted that since gold also fell within the same period, the negative correlation of the precious metal with Bitcoin may have cushioned the digital asset from further decline.
