Bitcoin’s Relative Value: Is BTC Undervalued Against Gold and the Money Supply?
In a market often driven by short-term sentiment, a notable contrarian voice has emerged with a data-driven argument for Bitcoin’s (BTC) underlying value. Samson Mow, CEO of Bitcoin infrastructure company Jan3, posits that the leading cryptocurrency is significantly undervalued when measured against traditional stores of value like gold and the global money supply. This perspective suggests a potential price reversal may be on the horizon, even as other analysts warn of further downside.
Mow’s analysis, shared on the social platform X, centers on a comparative ratio. He states that Bitcoin’s market position is currently “24%-66% below its trend relative to gold’s market cap or global money supply, while gold is overextended.” This framing implies that gold may be due for a correction relative to the expanding digital asset class. For context, gold futures for April delivery recently settled at $5,247.90, while tokenized gold PAX Gold (PAXG) was trading around $5,404.14 at the time of writing, highlighting gold’s sustained strength.
The Signal From the Z-Score: A Metric with a Prophetic History
The core of Mow’s technical argument relies on the Z-score of the Bitcoin-to-gold ratio, a statistical tool available on platforms like TradingView. A Z-score measures how far a data point deviates from the historical mean. A score of 0 means the ratio is at its long-term average; a negative score indicates it’s below that average.
Mow identifies a critical threshold: when the Z-score of the BTC/gold ratio drops below -2, it has historically preceded “major” Bitcoin price rallies. As of the latest data, this Z-score sits at approximately -1.24, suggesting BTC is trading below its historical average against gold but has not yet reached the extreme signal zone.
Looking to past extremes provides compelling evidence for this pattern. In November 2022, following the catastrophic collapse of the FTX exchange, the Z-score plunged below -3. Over the subsequent 12 months, Bitcoin’s price rallied by over 150%. A similar, even more dramatic precedent occurred during the COVID-19 market crash in March 2020. When the metric fell below -2, BTC hit a low near $3,717. The following year saw a surge of over 300%, culminating in the November 2021 all-time high near $69,000.
A Contrarian View in a Bearish Landscape
Mow’s bullish stance stands in stark contrast to a more prevalent market narrative. A significant contingent of crypto analysts forecasts further pain for Bitcoin, citing persistent investor uncertainty and escalating geopolitical tensions as primary headwinds. This camp points to technical patterns that some believe mirror the 2022 bear market.
This bearish viewpoint notes that Bitcoin recently experienced a sharp drop of over 50% from its peak to a low of $60,000. While it has staged a partial recovery to trade near $66,400 at the time of writing, following weekend developments in the Middle East, the argument is that the current structure could portend a deeper correction. Some projections even suggest a potential retest of the $50,000 level.
The divergence between these two analyses—one rooted in long-term relative value metrics and historical statistical extremes, the other in near-term technical and macro-prudential caution—highlights the profound uncertainty in today’s crypto markets. Mow’s data suggests that extreme pessimism, as measured by the BTC/gold ratio, has been a reliable buying opportunity in the past. Whether the current Z-score signal will repeat history remains one of the market’s most critical questions.
Data sources for price levels and the Z-score metric are from TradingView and market data aggregators. Historical price and event references are based on public market records. This article is produced in accordance with Cointelegraph’s Editorial Policy, which prioritizes accuracy and independent verification. Readers are encouraged to conduct their own research.
