Global Crypto Market Shaken Again: Bitcoin (BTC) Price Drops as Traditional Stocks Also Weaken
The global crypto market is experiencing renewed turbulence as Bitcoin (BTC) prices decline, mirroring weakness in traditional stock markets. At the same time, investment bank JPMorgan has released a new research report indicating that Bitcoin is currently undervalued by about $68,000 compared to gold—even suggesting that Bitcoin may hold greater long-term value. In this article, we’ll dive deep into the logic behind this assessment, the market signals at play, and the potential implications.
1. Shifting from Gold to Bitcoin? JPMorgan’s New Perspective
JPMorgan’s latest analysis, led by global market strategist Nikolaos Panigirtzoglou, notes that at the end of last year, Bitcoin was overvalued by about $36,000 relative to gold. However, after recent corrections, Bitcoin is now undervalued by roughly $68,000 compared to gold.
The report highlights that despite Bitcoin facing multiple challenges recently—including declines in US equities, ETF outflows, and macroeconomic uncertainty—signals of undervaluation are clear when assessing Bitcoin as a "volatility-adjusted gold alternative."
2. Market Environment: Bitcoin, Stocks, and Gold Move in Tandem
Recent data shows that the price of Bitcoin surged past $126,000 at its peak, but has since pulled back more than 20% since late October. This month, it even briefly dipped below the $100,000 psychological threshold. Meanwhile, US stock indices like the S&P 500 and Nasdaq 100 have also declined, reflecting broad pressure on risk assets.
Key contributing factors include:
- US corporate layoffs in October exceeded 153,000, the highest since 2003, raising concerns about the economic outlook.
- Expectations for a Federal Reserve rate cut have risen, but market confidence in actual action remains weak.
- Bitcoin-related ETFs saw approximately $900 million in outflows, signaling waning institutional demand.
Against this macroeconomic backdrop, JPMorgan’s reassessment of Bitcoin’s valuation stands out as particularly noteworthy.
3. Why Is Bitcoin "Undervalued Relative to Gold"?
1. Market Cap and Alternative Asset Comparison
According to the report, with Bitcoin’s current market cap around $2.1 trillion, it would need to rise about 66%—to roughly $170,000—to match the "volatility-adjusted" level of total private gold investment worldwide (about $6.2 trillion).
2. Deleveraging Nears Completion
The analysis points out that the ratio of Bitcoin perpetual futures open interest to market cap has recently returned to its average level since January 2024, suggesting that extreme long-side risk has been reduced.
3. Strengthening the Gold Alternative Narrative
As inflation rises and the US dollar weakens, gold’s appeal as a safe haven asset has grown. JPMorgan believes that if Bitcoin can solidify its role as "digital gold," its current undervaluation becomes even more pronounced.
4. Potential Opportunities and Key Risks to Watch
✅ Opportunities
- If the Federal Reserve initiates rate cuts or signals policy easing, Bitcoin could benefit.
- Increased recognition of digital assets and the gold alternative narrative could drive capital inflows into Bitcoin.
- With current valuations considered low, there is potential for a rebound in the medium to long term.
⚠️ Risks
- If macroeconomic conditions worsen, risk assets across the board—including Bitcoin—could face further pressure.
- Should expectations for rate cuts or easing fail to materialize, a strong US dollar could suppress Bitcoin’s upside.
- Despite being undervalued, Bitcoin currently lacks a strong short-term catalyst, so any rebound may be slow.
5. Investor Perspective: Strategy Recommendations
- Clarify your investment horizon: For those with a medium-to-long-term outlook (12 months or more) who believe in the digital gold thesis, consider accumulating gradually. If you favor short-term gains, exercise caution.
- Manage position sizing and diversify: While Bitcoin offers significant upside potential, it remains highly volatile. Avoid concentrating all your capital in a single asset.
- Monitor key indicators: Watch for trends in Bitcoin ETF flows, changes in gold liquidity, Federal Reserve policy moves, and shifts in stock market risk sentiment.
- Set clear take-profit/stop-loss levels: The current key psychological price range is around $100,000–$102,000, but downside risks should not be ignored.
6. Conclusion: Is This Undervaluation a Turning Point or a Trap?
JPMorgan’s report offers a fresh perspective, suggesting that Bitcoin is "undervalued relative to gold." Against the backdrop of valuation corrections, shifting financial conditions, and the evolving role of digital assets, Bitcoin may have room for a medium- to long-term recovery.
However, this does not mean Bitcoin is poised for an immediate rally. The market remains volatile and policy uncertainty persists. For investors, this moment represents both a potential "value window" and a period of heightened risk that requires clear-eyed assessment.
