Bitwise: Bitcoin's 'Deep Discount' vs. Gold Signals Major Mispricing Below $100K
Introduction: A Stark Macroeconomic Disconnect
In the complex dance of global finance, assets are expected to respond to fundamental monetary currents. Yet, a profound and growing divergence has captured the attention of analysts: while global liquidity is surging at an unprecedented pace, Bitcoin (BTC) remains conspicuously subdued, trading below the $100,000 mark. This behavior represents what asset manager Bitwise has identified as one of Bitcoin's "deepest macroeconomic disconnects in years." Simultaneously, gold has soared to record highs, absorbing what Bitwise terms the "monetary-dilution bid" that Bitcoin has historically captured. This stark contrast between the two premier non-sovereign stores of value is not just a curious market anomaly; according to recent analysis, it signals a significant mispricing in Bitcoin, potentially setting the stage for a major asymmetric opportunity as we move toward 2026.
The Global Liquidity Tsunami: A Bullish Backdrop Ignored
The foundational argument from Bitwise's latest Monthly Bitcoin Macro Investor report is that the underlying macroeconomic environment is overwhelmingly bullish for scarce assets. The world's central banks and governments have decisively pivoted toward reflationary policies.
In the United States, the Treasury is issuing nearly $1.9 trillion in securities annually. Former President Donald Trump has promised $2,000 stimulus checks, adding potential fiscal fuel. Critically, the Federal Reserve's quantitative tightening (QT) program concluded on December 1, removing a persistent headwind. The stimulus wave is global. Japan is deploying a $110 billion package, Canada has restarted its quantitative easing (QE) program, and China has approved a massive $1.4 trillion fiscal initiative. This coordinated shift has occurred alongside a dramatic easing cycle, with more than 320 global interest rate cuts executed over the past 24 months.
The direct result is a historic expansion in the global money supply (M2), which has surged to a record $137 trillion. In such an environment, hard assets with limited supply—historically including Bitcoin—typically act as a hedge against currency dilution.
Bitwise's Model Reveals a 66% Undershoot: A $270K Fair Value?
Against this torrent of new money, Bitwise highlights a staggering valuation gap for Bitcoin. The firm employs a cointegration model that analyzes Bitcoin's long-term relationship with global money supply growth. The current data reveals a dramatic disconnect: Bitcoin is currently undershooting the global money supply by roughly 66%. According to this model-based analysis, this disconnect implies a fair value for Bitcoin near $270,000.
This translates into a hypothetical upside of approximately +194% if Bitcoin were to revert to its long-term liquidity anchor. The report emphasizes that this matters because Bitcoin has historically served as "the most sensitive barometer for monetary dilution due to its absolute scarcity." In simpler terms, the model suggests Bitcoin's price has not kept pace with the sheer scale of monetary expansion it was designed to hedge against, creating one of the largest valuation gaps in its history.
Gold's Dominance: Soaking Up the "Monetary-Dilution Bid"
While Bitcoin lags its model-implied value, gold has performed the opposite feat. Bitwise notes that gold has taken the bulk of 2025’s monetary-dilution bid and now overshoots global M2 by 75%. Gold's price has reached successive record highs, demonstrating its classic role as a safe-haven asset during periods of fiscal stimulus and monetary easing. This creates a fascinating dichotomy: both assets are theoretically responding to the same macro driver (currency dilution), but their price actions have been diametrically opposed in the recent period.
This divergence underscores a potential rotation opportunity. If investor perception shifts or if Bitcoin begins to attract flows seeking an alternative to gold's now-elevated valuation, the capital movement could be significant.
A Tale of Two Ratios: Bitcoin Trails Gold on Risk-Adjusted Metrics
The performance gap is further quantified by Jurrien Timmer, Director of Global Macro at Fidelity Investments. Timmer observes that Bitcoin’s trend setup currently trails gold across both momentum and Sharpe ratio metrics, placing the two assets at what he calls “polar opposites.”
The Sharpe ratio is a critical measure of risk-adjusted return; it calculates how much return an asset generates per unit of volatility. Gold's superior Sharpe ratio indicates it is currently delivering stronger returns relative to its price swings compared to Bitcoin. While Timmer clarifies this does not yet signal an immediate reversal, he frames this widening divergence as a "potentially compelling mean-reversion setup." Historically, such extreme divergences between correlated or competing assets often correct over time.
Long-Term Perspective: Bitcoin's "Power-Law" Trajectory Remains Intact
Despite the current underperformance and drawdown from its highs above $100,000, Timmer provides crucial long-term context. Zooming out, he notes that Bitcoin remains broadly aligned with its long-term power-law adoption curve. This model tracks Bitcoin's price against its network growth over multi-year timescales and has demonstrated remarkable predictive resilience.
This perspective suggests that while short-term macro dislocations exist, Bitcoin's foundational growth narrative remains structurally sound. Timmer characterizes BTC as “gold’s precocious younger sibling growing up,” implying it is maturing—exhibiting less extreme volatility while maintaining its core value proposition.
Strategic Conclusion: Navigating the Divergence
The analyses from Bitwise and Fidelity’s Jurrien Timmer paint a coherent picture of a significant market dislocation. The convergence of three key facts is notable:
- Global liquidity is expanding aggressively, creating a historically favorable backdrop for scarce assets.
- Gold has reacted strongly to this environment, reaching record highs and overshooting its historical relationship with money supply.
- Bitcoin has not, trading at what Bitwise’s model suggests is a deep discount to its typical correlation with monetary expansion.
This sets up a compelling macroeconomic narrative for Bitcoin heading into 2026. The "asymmetric opportunity" Bitwise references lies in the potential for this gap to close. Should Bitcoin begin to recapture its historical role as a liquidity-sensitive asset, or should even a fraction of the flows currently directed at gold seek a diversifier or a catch-up trade, the re-rating could be substantial based on the modeled fair value.
For professional crypto readers and investors, the immediate implication is to monitor macro indicators and relative asset performance closely. Key watchpoints include:
- Continued Global M2 Growth: Persistence of expansive fiscal and monetary policy.
- Bitcoin-Gold Correlation: Any signs of convergence in momentum or risk-adjusted return metrics.
- On-Chain and Flow Data: Evidence of renewed institutional or macro-driven capital inflows into Bitcoin ETFs or direct holdings.
The current sub-$100,000 price level for Bitcoin, therefore, is not occurring in a vacuum. It exists within a macro context that multiple analyses suggest is profoundly supportive. The deep discount versus gold and its own historical liquidity model presents a clear thesis: Bitcoin’s current price may reflect a temporary disconnect rather than a diminished long-term value proposition in an era of unprecedented monetary expansion.
This article is based on analysis from Bitwise and Fidelity Investments and does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.