Bitcoin could be significantly undervalued relative to gold, according to an analysis by Samson Mow, CEO of Jan3.
Mow argues that Bitcoin is trading between 24% and 66% below its historical trend when measured against gold’s market capitalization and the global money supply. At the same time, gold has surged sharply, widening the valuation gap between the two assets.
Meanwhile, gold has rebounded to $5,400, widening the valuation gap between the two assets and highlighting Bitcoin’s discount relative to its historical trend.
The Bitcoin to Gold Z Deviation That Marked Past Bottoms
At the center of the argument is the Bitcoin to gold ratio’s Z-deviation. This metric measures how far Bitcoin’s current price deviates from its long-term historical relationship with gold.
A reading of zero signals alignment with historical averages. Positive values indicate Bitcoin is trading above trend, while negative values suggest it is below trend. At the time of publication, the indicator stood near -1.24.
When The Indicator Dropped Below -2
Historically, sharper declines have preceded powerful rebounds. In November 2022, during the collapse of FTX, the Z-deviation fell below -3. Over the following 12 months, Bitcoin climbed more than 150%.
A similar pattern appeared during the March 2020 crash triggered by the COVID-19 pandemic. After the metric broke below -2 and Bitcoin fell near $3,717, the asset surged more than 300% within a year, eventually reaching its then all-time high near $69,000 in November 2021.
A Structural Shift or Another Setup for a Rally
The 2025 backdrop, however, looks different. The Bitcoin to gold ratio has dropped roughly 50% over the past year as gold gained 63%, benefiting from safe-haven flows. Bitcoin, by contrast, has lagged amid tighter monetary conditions and shifting institutional preferences.
From a quantitative perspective, the deeply negative Z-deviation could signal an oversold condition. Yet some analysts caution that Bitcoin’s current price action resembles the 2022 bear market structure and warn that a move toward $50,000 remains possible.
Whether this widening discount represents a rare long-term opportunity or a reflection of a broader structural shift will depend on how capital flows evolve in the coming months. For now, the signal that once marked major turning points is once again approaching levels investors cannot easily ignore.
