JPMorgan: Bitcoin fails as dollar hedge, gold outperforms

JPMorgan reports Bitcoin failed to hedge against the dollar’s decline. Investors now favor gold, while Bitcoin is seen as a risk asset, not a safe haven.

Recent JPMorgan analyses indicate that Bitcoin has not acted as a hedge against the US dollar's decline, challenging a key narrative in the crypto industry. Over the past year, the US Dollar Index (DXY) dropped about 10%, but Bitcoin fell by roughly 13%, defying expectations that a weaker dollar would boost Bitcoin’s value. JPMorgan strategists attribute this divergence to short-term capital flows and shifting market sentiment, rather than fundamental changes in US economic growth or monetary policy. Interest rate differentials continue to favor the dollar, suggesting its current weakness may be temporary. As a result, investors are increasingly turning to gold and other precious metals, which have reached historic highs. Bitcoin, meanwhile, is being viewed more as a liquidity-sensitive risk asset than a reliable store of value. JPMorgan’s critical stance underscores that Bitcoin’s role as a dollar hedge remains unproven in today’s market.