Bitcoin BTC/USD Has Entered a Zero-Sum Phase with Gold, JPMorgan Says

After rising in tandem last year as hedges against currency depreciation, Bitcoin BTC/USD and gold are no longer moving in sync.

Bitcoin BTC /USD and gold began 2024 in tandem, both rising as hedges against currency depreciation. However, that correlation has since broken down, and the two assets are now largely moving in a zero-sum fashion, according to JPMorgan.

What Happened: According to The Block, the two assets have entered a competitive dynamic in 2025, with gains in one increasingly coming at the other's expense.

JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, observed a reversal in capital flows in recent months. From mid-February to mid-April, gold outperformed while Bitcoin lagged.

But since late April, the trend has flipped: Bitcoin has climbed 18% while gold has dropped nearly 8%. Investor flows and futures data support this divergence, with capital leaving gold ETFs and entering Bitcoin funds.

The bank's strategists expect this competitive dynamic between the two assets to persist through the remainder of the year, though they see more potential upside for Bitcoin.

“We are biased towards crypto-specific catalysts creating more upside for Bitcoin over gold into the second half of the year,” the note said.

One major factor behind Bitcoin's rise is increased institutional and public sector adoption. Strategy MSTR and Metaplanet have continued accumulating Bitcoin aggressively.

Strategy alone has already secured 60% of its $42 billion goal for Bitcoin purchases, aiming to complete it by 2027.

State Funds Now Flowing Into Bitcoin: A New Hampshire law now permits up to 5% of state assets to be held in Bitcoin and gold.

Arizona is establishing a digital asset reserve funded by staking yields and token airdrops, and in return, will keep taxes at the same level.

These developments signal a growing acceptance of Bitcoin as a strategic reserve asset, and if more states follow suit, it could become a more significant factor.

At the same time, structural changes in the crypto derivatives market are boosting investor confidence. Coinbase's COIN acquisition of Deribit, Kraken's purchase of NinjaTrader, and Gemini's expansion into European derivatives licensing are seen as milestones that could usher in greater institutional engagement, especially as regulatory clarity improves.

Overall, with gold facing pressure and Bitcoin benefiting from sector-specific growth, JPMorgan anticipates the second half of the year to favor the leading cryptocurrency.