The rivalry between Bitcoin (BTC) and gold has been ongoing for years.
While Bitcoin has been strengthening its position as a digital gold hedge, a new report from JPMorgan has arrived. JPMorgan says Bitcoin’s “digital gold” status is being tested amid rising volatility, ETF outflows and increased investor doubt.
According to The Block, JPMorgan analysts said Bitcoin is losing value against gold as investors turn to safer hedges. Analysts said Bitcoin’s “digital gold” position has weakened due to its increasing volatility and strong correlation with technology stocks, while physical gold continues to attract interest among investors.
JPMorgan analysts led by Nikolaos Panigirtzoglou said:
“Looking ahead, we see gold continuing to rise as the biggest beneficiary of the depreciation trade.”
“In contrast to the continued inflows into gold ETFs, spot Bitcoin ETFs have seen outflows in the past two months. This signals that investors turned to gold in February and March.”
Throw trading is a strategy that focuses on purchasing assets like gold and Bitcoin to hedge against inflation, long-term debt, and weakening fiat currencies.
As for Bitcoin, JPMorgan said its current price of around $83,100 still trades above its estimated cost of production of $62,000. Analysts have noted that historically, the cost of production has served as a lower bound for BTC. Analysts also noted that Bitcoin’s risk-adjusted price is around $71,000, saying that these two levels are two important support levels for BTC.
*This is not investment advice.