Bitcoin is expected to outperform gold in the second half of 2025 due to strong ETF capital inflows and support from US state governments, according to JPMorgan.
Bitcoin is experiencing strong growth, first surpassing the $100,000 mark while gold weakens 8% since the end of April. According to JPMorgan, the investment capital shift between these two assets will continue in 2025, with an advantage tilting towards digital currency due to specific crypto market factors.
"From mid-February to mid-April, gold prices increased due to capital flows from bitcoin; in the past three weeks, we've seen the opposite - bitcoin prices rising due to capital withdrawals from gold," the analysis group led by Nikolaos Panigirtzoglou noted in their latest report.
This global investment bank forecasts a "zero-sum game" between gold and bitcoin for the entire year, but "specific crypto catalysts" will create more price appreciation potential for bitcoin in the second half of the year.
Expectations of Fed rate cuts have weakened, and stock market gains have caused capital outflows from gold ETFs like SPDR Gold Trust. Meanwhile, capital inflows into spot bitcoin ETF have increased continuously for three weeks. The futures market also reflects this trend with gold positions shrinking and bitcoin exposure increasing.
Institutional Crypto Wave from Businesses to Governments
JPMorgan emphasizes that bitcoin's growth comes not only from gold's weakness but also from increasing acceptance by businesses and governments. More companies are buying bitcoin as a strategic reserve asset, with Strategy (formerly Microstrategy) continuing to aggressively expand their BTC holdings, and Japan's Metaplanet also incorporating bitcoin into their treasury.
In the public sector, US states are institutionalizing bitcoin into the financial system. New Hampshire has passed a law allowing up to 5% of state reserves in bitcoin and gold - a historic step in public finance. Arizona is creating a digital asset reserve fund using staking rewards and airdrops without using tax money.
"As this list expands, with the possibility of other states considering adding bitcoin to strategic reserves, this could become a sustainable positive catalyst for bitcoin," the JPMorgan group noted.
The crypto market institutionalization process is accelerating through large M&A deals and legal victories aimed at consolidating infrastructure and reputation. Coinbase bought Deribit for $2.9 billion to lead the crypto derivatives segment, while Kraken spent $1.5 billion acquiring Ninjatrader to expand deeply into the futures market.
Gemini received a full EU derivatives license, Robinhood bought Wonderfi for $179 million to expand in Canada, and Ripple integrated traditional finance with crypto through a $1.25 billion acquisition of the Hidden Road credit network.
These moves are expected to attract a new wave of institutional capital into bitcoin and the crypto market in general, continuing to consolidate the position of digital assets compared to gold in the coming time.
