Multiple Catalysts Support the Trend: JPMorgan Optimistic About Bitcoin Outperforming Gold in the Second Half of the Year

Bitcoin Expected to Outperform Gold in the Second Half of the Year

Catalysts for Bitcoin’s Rise

According to the report, the strengthening of gold has suppressed Bitcoin; however, in the past three weeks, a reversal has occurred, with Bitcoin’s rise squeezing gold’s performance space. Bitcoin has surged approximately 18% in just three weeks, while gold prices have retreated nearly 8%. JPMorgan analyst Nikolaos Panigirtzoglou candidly stated that this bull market, triggered by “currency depreciation trades,” has now turned into a zero-sum competition between gold and Bitcoin. Furthermore, the report adds that as more catalysts related to cryptocurrencies themselves emerge in the market, they are more optimistic about Bitcoin’s potential for growth exceeding that of gold in the second half of the year.

Not only has the price performance diverged, but investment funds are also being reallocated. The report indicates a significant outflow of funds from gold-related ETFs, while inflows into spot Bitcoin and cryptocurrency funds continue to strengthen. Data from the futures market also echoes this trend: declines in gold positions and increases in Bitcoin futures positions.

However, Bitcoin’s strength is not solely due to gold’s fading appeal; it is also driven by multiple bullish factors intrinsic to Bitcoin itself. The report mentions that companies, including Strategy (formerly MicroStrategy) and the Japanese listed company Metaplanet, continue to purchase Bitcoin on a large scale, with Strategy planning to invest up to $42 billion in Bitcoin acquisitions by 2027, having already completed 60% of its goal.

Additionally, some state governments in the United States are beginning to incorporate Bitcoin into their fiscal asset reserves. For instance, New Hampshire allows up to 5% of reserves to be allocated to Bitcoin and gold, while Arizona recently passed legislation related to digital asset reserves.

This series of actions at the corporate and governmental levels is viewed by JPMorgan as a “native catalyst for cryptocurrencies” that supports Bitcoin’s medium- to long-term performance. The report states: “As more states join in, this could become a sustained positive catalyst driving Bitcoin’s medium- to long-term performance.”

On the other hand, the rapid maturation of the cryptocurrency derivatives market is also paving the way for further institutionalization of Bitcoin. Events such as Coinbase’s acquisition of Deribit, Kraken’s acquisition of NinjaTrader, and Gemini obtaining a European derivatives license are all seen as important measures to enhance market transparency and trust, further attracting institutional funds into the market.