In the first half of this year, the market witnessed a remarkable process of asset reallocation: the gold and Bitcoin that originally rose in sync in the fourth quarter of 2024 have now evolved into a "zero-sum game."

According to news from the Wind Trading Desk, JPMorgan wrote in a research report this week that since the gold price peaked at $3,500 on April 22, it has fallen nearly 8%, while Bitcoin's price has increased by 18% during the same period. This pattern of rise and fall is expected to continue until the end of the year, but several unique positive catalysts related to cryptocurrencies may enable Bitcoin to outperform gold in the second half of the year.

Capital flows confirm the "seesaw" effect between gold and Bitcoin.

JPMorgan stated that the asset flow data from the recent three weeks clearly demonstrates this relationship of rise and fall.

The behavior of retail and private investors shows a capital outflow from physical gold and spot ETFs, while Bitcoin/cryptocurrency ETFs have experienced an inflow of funds. The futures market also shows a similar trend: gold futures continue to decline, while Bitcoin futures have seen significant growth. This contrasts with the tariff events from mid-February to mid-April this year, when gold rose strongly, while Bitcoin fell in line with risk assets.

In response, JPMorgan analyzed that before and after the U.S. elections in the fourth quarter of 2024, gold and Bitcoin had risen in sync, exhibiting a common "currency depreciation trade" characteristic. However, entering 2025, this synergy has stagnated and transformed into a zero-sum game between the two.

From mid-February to mid-April, the rise of gold came at the expense of Bitcoin's decline; however, in the past three weeks, the opposite trend has emerged—Bitcoin has risen while gold has fallen.

"Unique" multiple catalysts support the upward momentum of Bitcoin.

JPMorgan believes that Bitcoin's performance in the second half of this year will outperform gold. They suggest that in addition to benefiting from the decline in gold, Bitcoin also benefits from several unique positive factors related to cryptocurrencies:

1. Trend of corporate accumulation

Companies like MicroStrategy and Metaplanet are actively increasing their holdings of Bitcoin. MicroStrategy announced plans to raise another $42 billion (for a total of $84 billion) by 2027 to purchase Bitcoin, with its initial $42 billion "21/21" plan already 60% completed.

2. U.S. state government investment entry

New Hampshire has become the first state in the U.S. to pass a bill allowing state finances to invest in the cryptocurrency market, authorizing up to 5% of state assets to be invested in Bitcoin and gold. Arizona has also taken a budget-neutral approach to establish a reserve fund for Bitcoin and other digital assets. As more U.S. states may consider adding Bitcoin to their strategic reserves, this could become a continuing positive factor for Bitcoin.

3. Maturation of the derivatives market

U.S. cryptocurrency exchanges are acquiring crypto derivatives platforms, such as Coinbase acquiring Deribit, which accounts for 85% of global crypto options trading, Kraken acquiring the U.S. futures platform Ninja Trader, and Gemini obtaining a MiFID II license to offer derivatives in the Eurozone. This indicates that the crypto derivatives market is maturing and, by incorporating U.S. or EU regulations, may enhance the confidence and participation of traditional institutional investors.