We’re apparently at the part of the market cycle where a former cardboard-box company says it’s buying crypto, and its shares jump 3,000% in a day. I can’t remember all the cycle phases—is late-money stampede transitioning into bullish-bacchanalian denial one of them?

The company is called Eightco Holdings, and in fairness, it got out of corrugated packaging way back in April to focus on its other business of buying and reselling inventory from other e-commerce resellers, or, well, e-re-re-selling. This past week, it announced a private stock sale and says it plans to accumulate a cryptocurrency called Worldcoin.

The deal touched every part of the investment meme-osphere. Worldcoin is backed by OpenAI founder Sam Altman, the guy behind ChatGPT. Eightco appointed Wall Street analyst and Tesla super-bull Dan Ives as its chairman. It also received a cash infusion from BitMine Immersion Technologies, backed by venture capitalist Peter Thiel and chaired by Wall Street crypto analyst Tom Lee. BitMine stockpiles a different currency called Ethereum, and was recently the third-largest publicly traded crypto treasury, as companies in the business of hoarding these currencies are called. There are now more than 200 such companies. The largest are Bitcoin big shots Strategy, formerly MicroStrategy, and Mara Holdings.

I want to turn to gold for a moment before coming back to crypto treasuries. For now, just know that prices for pretty much everything involved in the Eightco deal rose. BitMine went up, and so did Worldcoin—by a lot. If that’s confusing, just picture Orville and Wilbur Wright in 1903 on that sandy stretch near Kitty Hawk, N.C. Only instead of boarding a gasoline-powered biplane, imagine that they grabbed each other’s waistbands and achieved sustained flight by administering simultaneous wedgies. See? Simple.

If you’ve wondered, like I have, whether crypto would eventually rob gold of some of its allure, the answer so far is no. Gold has jumped 39% year to date, spanking both Bitcoin, up 22%, and the S&P 500 index, up 12% with dividends. In an April cover story on gold, I noted that J.P. Morgan described the stockpiling of both the metal and Bitcoin as part of a debasement trade to protect against declines in the value of the dollar. The bank’s strategists have fresh thoughts on what’s next. There’s a bit of cross-wedgification involved.

On the S&P 500, JPM is short-term cautious. The index, following its best five-month performance in roughly two decades, is priced at 24 times this year’s projected earnings. Some 30 artificial-intelligence stocks recently made up 43% of the index’s market value, and since the public introduction of ChatGPT in November 2022, these have contributed nearly all of the returns and most of the earnings growth. A continued run-up from here could depend on investors interpreting bad economic signs like weak jobs numbers as good news for the prospects of interest-rate cuts, even in the face of an inflation rate that is higher than the Federal Reserve would like.

The bank, also the world’s largest bullion dealer, is exceedingly bullish on gold. It calls the metal “one of the most effective hedges against the risk of removal or reduction of Fed independence,” but says that most of the recent price action can be traced to a resumption of gold’s negative correlation with short, real interest rates.

See, the one-year Treasury yield has tumbled to 3.6% from over 5% since the summer of last year, partly in anticipation of rate cuts. But the year-over-year inflation rate hasn’t changed as much over the same stretch, reading 2.9% recently versus 3.1% back then. That means that real, or net-of-inflation, yields on short Treasuries have collapsed. And gold has been moving opposite of those. Put differently, investors suspect that the Fed will let inflation run a little hot to fend off joblessness, and that could continue to be bad for the buck but good for gold. It all works out to a price target for gold of $4,020 by next summer, up from $3,640 recently.

Here’s where things turn more circular. The Bitcoin price now looks too low relative to gold, JPM strategists have explained. The reason? All that hoarding by crypto treasury companies—I told you I’d come back to that. Corporate treasuries now hold more than 6% of total Bitcoin supply. That’s enough to resemble quantitative easing, or purchases of government bonds by central banks following the financial panic of 2008. One effect of QE was to suppress volatility. Likewise, Bitcoin volatility has been cut in half this year to historically low levels.

In finance, risk and return are said to be directly related. Just between us, investment risk is a fairly amorphous concept that defies precise measurement, and even though past price volatility is often used as a proxy for risk, the two aren’t nearly the same. But let’s not get bogged down in details while I’ve got a head of steam on nonsense. The ratio of Bitcoin’s rolling six-month volatility to that of gold has fallen to 2.0, the lowest on record. That being so, the recent $2.2 trillion market value of Bitcoin looks a touch low relative to the $5 trillion of private-sector gold held in exchange-traded funds, coins, and bars. Bitcoin deserves a 13% lift, reckons JPM.

It gets better (or worse). Crypto treasury leader Strategy has been denied membership in the S&P 500 so far, but it has made it into the Russell 1000. As more such companies gain entry into indexes, their shares will attract more passive investment flows, providing, perhaps, more equity capital to finance future coin purchases.

And there you have it: a gold-based, self-reinforcing case for Bitcoin. Now if only there were a way to tie it into an argument for a higher S&P 500. Orville and Wilbur had other brothers, you know. I’m still working on the math, while hoping the market’s waistband will hold.