Bitcoin has outperformed gold in investor portfolios when adjusted for volatility, but in terms of value, this is unrealistic. This conclusion was reached by JPMorgan, reports The Block.
Analysts noted that the status quo will persist, despite significant inflows into ETFs based on the first cryptocurrency.
According to the specialists, risk is a critical factor. It is often overlooked by those predicting the displacement of traditional gold by its digital counterpart.
JPMorgan’s conclusions took into account Bitcoin’s volatility, which exceeds that of its competitor by 3.7 times.
According to the specialists’ calculations, if the first cryptocurrency were to match gold in terms of risk capital allocated for speculation, the distribution would shrink to $0.9 trillion.
This figure was obtained by dividing the $3.3 trillion invested in the precious metal by Bitcoin’s volatility (3.7).
“This implies a price of $45,000, which is significantly below current levels,” the report states.
In other words, at the current level of $66,000, the implied distribution of the first cryptocurrency in investor portfolios has already exceeded that of gold when adjusted for volume.
Experts estimate that in the next two to three years, inflows into spot Bitcoin ETFs will reach $62 billion. These estimates were derived by comparing with the share of precious metal held in bullion (7% or $230 billion out of $3.3 trillion).
JPMorgan called the outlined target “realistic.” Experts added that a significant portion of the anticipated net inflow could result from a gradual transition from existing instruments to exchange-traded funds.
According to BitMEX, since the launch on January 11, net inflow into spot Bitcoin ETFs has reached $8.9 billion.
Earlier, ETC Group’s Head of Research, Andre Dragos, stated that in the long term, the first cryptocurrency will undermine gold’s position as the primary store of value.
Experts have noted a capital shift from precious metal-based ETFs to Bitcoin funds.