JPMorgan: Bitcoin is Now a More Attractive Investment Than Gold Long Term

JPMorgan analysts argue that Bitcoin has become a more attractive long-term investment than gold due to recent market developments. According to Nikolaos Panigirtzoglou, the bank's quantitative strategist, the volatility differential between the two assets has widened, making Bitcoin a more appealing option for risk-adjusted returns.

Bitcoin's price has fallen below JPMorgan's estimated production cost of $87,000. This level, historically a soft floor for the asset, now serves as a potential support point for the cryptocurrency. Panigirtzoglou noted that the decline in Bitcoin's price relative to gold's strong performance could lead to a rebalancing of investor allocations.

The volatility ratio between Bitcoin and gold has hit an all-time low of 1.5. This measure, according to JPMorgan, suggests that Bitcoin has become less risky in comparison to gold. On a volatility-adjusted basis, the bank estimates that Bitcoin's market cap would need to reach $266,000 to match the private sector's investment in gold. This figure, however, is seen as a long-term benchmark rather than a near-term target.

Why Did This Happen?

Bitcoin's recent price action has been marked by significant underperformance compared to gold. From October to February 2026, gold gained about a third in value, while Bitcoin lost more than 40%. This divergence has led to questions about Bitcoin's role as a hedge against systemic risks or as a store of value.

The cryptocurrency market also faced broader headwinds in early 2026. These included a correction in gold and silver, as well as the $26 million Solana Step Finance hack. Despite these challenges, JPMorgan noted that position liquidations in the crypto markets had been more measured than in previous quarters.

How Did Markets Respond?

Bitcoin ETFs have seen significant outflows in recent weeks. On Wednesday, U.S. spot Bitcoin ETFs recorded a net outflow of $545 million. This brought weekly flows to a negative $255 million, marking a sharp reversal from the strong inflows seen in late 2025.

The outflows reflect a broader trend of declining sentiment across the crypto market. Total assets under management in Bitcoin ETFs have fallen from a peak of $168 billion in October to below $100 billion in February 2026. This is the first time since April 2025 that ETF assets have dropped below the $100 billion threshold.

What Are Analysts Watching Next?

JPMorgan believes that Bitcoin's current valuation offers a compelling risk-reward profile. The bank estimates that the cryptocurrency's price should recover toward production cost levels as unprofitable miners exit the market. This could create a natural floor for Bitcoin's price in the coming months.

Market observers are also watching whether institutional investors continue to hold through the current downturn. Despite recent outflows, institutional participation remains relatively strong, with only 6% of ETF-held Bitcoin assets having been redeemed as of February 2026.

Some analysts believe that the current correction may be a precursor to a longer-term shift in institutional adoption. As more firms move to direct on-chain trading rather than relying on securitized ETFs, the demand for Bitcoin could stabilize or even increase.

The broader market is also watching for signs of renewed buying interest in the coming weeks. If demand fails to return, the risk of a deeper bear market increases, according to some market analysts. This could further pressure ETF flows and institutional participation in the space.