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Bitcoin has long been pitched as “digital gold,” a hedge for moments when traditional markets wobble. But over the past year, that narrative has been tested hard. While gold surged to fresh highs on strong central bank buying and global risk aversion, bitcoin slid into 2026 with repeated monthly losses and weaker performance than many risk assets. On the surface, it looks like a clean decoupling and a loss for bitcoin. JPMorgan’s latest analysis says the story is more nuanced. $BTC

A clear split between safe havens
Gold benefited from classic safe-haven flows in 2025, rising more than 60% as investors sought protection from macro uncertainty. Bitcoin, by contrast, failed to attract the same defensive demand. Instead of acting as a hedge, it traded more like a risk asset, pressured by ETF outflows, futures liquidations, and thinning liquidity.

This divergence matters because it suggests investors are no longer treating bitcoin as an immediate crisis hedge. JPMorgan reads this as a temporary erosion of the “digital gold” narrative, driven more by sentiment and positioning than by any change in bitcoin’s core properties.

The role of flows: ETFs, futures, and stablecoins
The recent selloff hasn’t been isolated to spot markets. Redemptions from spot Bitcoin and Ether ETFs signal that both institutions and retail investors are pulling back risk. At the same time, futures liquidations have amplified downside moves, creating a feedback loop of forced selling.

An underappreciated signal is stablecoin supply. JPMorgan points out that stablecoin circulation has contracted alongside the selloff. That typically reflects lower on-chain liquidity and reduced trading activity a sign that capital is stepping to the sidelines rather than rotating within crypto. In other words, this isn’t just sector rotation; it’s risk-off behavior across the board.

Volatility: the quiet shift that changes the narrative
Here’s the counterintuitive part of JPMorgan’s view: gold’s volatility has risen sharply during its rally, while bitcoin’s volatility has compressed relative to gold. Historically, bitcoin’s extreme volatility was one of the main arguments against treating it as a store of value. If that volatility gap continues to narrow, bitcoin starts to look structurally more “investable” for long-term allocators who care about risk-adjusted returns.

JPMorgan frames this as a long-term setup rather than a near-term catalyst. Lower relative volatility doesn’t mean prices go up tomorrow it means bitcoin could fit more comfortably into diversified portfolios over time, especially for investors who compare assets on a volatility-adjusted basis.

The $266,000 thought experiment (and why it matters)

The analysts use a volatility-adjusted comparison to illustrate potential upside. If bitcoin were valued in line with gold on a volatility-adjusted basis, the implied price would be near $266,000. They’re clear this is unrealistic in the near term and not a price target.

The real takeaway isn’t the number it’s the framework. The exercise highlights how far sentiment has swung against bitcoin and how much re-rating could occur if perceptions change. If bitcoin is again viewed as a credible hedge for extreme tail risks what JPMorgan calls a “catastrophic scenario” capital allocation models could shift meaningfully, even without gold-like inflows.

What would need to change?

For bitcoin to reclaim a safe-haven narrative, several things likely need to happen:

Stabilization of flows: ETF redemptions and forced futures selling need to cool off.
Macro clarity: Investors need a clearer framework for when bitcoin is a hedge versus when it trades as a risk asset.Narrative reset: The market must see bitcoin not just as a speculative vehicle, but as a hedge for specific tail risks (currency debasement, capital controls, or systemic financial stress).

Until then, bitcoin may continue to underperform traditional safe havens during periods of stress even if its structural characteristics quietly improve in the background.

Right now, gold is winning the safe-haven trade, and bitcoin is paying the price for negative sentiment, ETF outflows, and leveraged positioning unwinds. But JPMorgan’s core point is forward-looking: as gold becomes more volatile and bitcoin’s volatility compresses, bitcoin’s long-term risk-adjusted appeal improves.
The “digital gold” label may look shaky today, but the volatility dynamics suggest bitcoin’s investment case isn’t dead it’s just early and out of favor. Over the long run, shifts in how investors measure and price risk could matter more than short-term performance gaps. $BTC
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