JPMorgan: Bitcoin's 'Digital Gold' Narrative Faces Pressure

BlockBeats News, April 3rd, according to The Block, Morgan Stanley analysts report that Bitcoin's narrative as "digital gold" is facing pressure, while the demand for gold remains strong. Morgan Stanley analyst Nikolaos Panigirtzoglou wrote in the report: "Bitcoin's volatility and its correlation with stocks have raised doubts about its 'digital gold' narrative. Looking ahead, we believe gold will continue to rise in 'debasement' trades and be the primary beneficiary."

Debasement trading is a strategy focused on buying assets like gold and Bitcoin to hedge against inflation, long-term debt, and the devaluation of fiat currency. The analyst pointed out: "Bitcoin's extraordinary performance by the end of 2024, along with its inherent high volatility, risk, and correlation with tech stocks, has led to its poor performance so far this year."

Spot Bitcoin exchange-traded funds (ETFs) have also seen outflows in the past two months, while gold ETFs continue to see inflows. The analyst noted that this indicates that private investors shifted their focus to gold in February and March. Bitcoin futures positions have been negative since mid-January, while gold futures have remained stable. This suggests that recent demand for gold may be primarily from private investors and central banks rather than speculative traders.