Bitcoin Undervalued vs Gold, Potential Rally: Samson Mow
Bitcoin (BTC) appears undervalued relative to gold and the global money supply, which could indicate a potential price reversal, according to Samson Mow, CEO of Bitcoin infrastructure firm Jan3. Mow said gold looks “overextended” after moving above $5,247 per ounce. Gold futures for April delivery closed Friday at $5,247.90, while tokenized gold PAX Gold USD (PAXG) was trading at $5,404.14 at the time of writing.
Mow also pointed to Bitcoin’s Z-score for the BTC-to-gold ratio, a measure of how far the ratio deviates from its long-term average. A reading of 0 indicates alignment with the average, values above 0 reflect movement above the average, and values below 0 show the ratio is below average levels.
The Z score of the Bitcoin-to-gold ratio. Source: TradingView
Mow said that when the Z-score of the BTC-to-gold ratio falls below -2, Bitcoin has historically seen “major” rallies. The reading is about -1.24 at the time of writing.
TradingView data shows the metric dropped below -3 in November 2022 during the collapse of crypto exchange FTX, after which Bitcoin rose by more than 150% over the following 12 months. A similar move occurred during the March 2020 COVID-19 market sell-off, when the metric fell below -2 and BTC reached a low near $3,717. Bitcoin subsequently gained over 300% in the next year and, by November 2021, set a then-record high around $69,000.
Bitcoin to crash to $50,000?
Mow’s view contrasts with some analysts who expect further weakness in crypto markets amid investor uncertainty and geopolitical risks. Several market commentators see the price potentially trending toward $50,000 and note similarities to the 2022 bear-market pattern.
Bitcoin fell by over 50% from peak to trough, to a low of $60,000, before a limited rebound to near $66,400 following developments in the Middle East over the weekend.
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