Analysts from JPMorgan project that a Trump victory in the upcoming U.S. election could fuel retail interest in both bitcoin and gold, though institutional investors remain cautious due to overbought futures.
Could Bitcoin and Gold See Gains? JPMorgan Analyzes Potential Trump Influence
Led by managing director Nikolaos Panigirtzoglou, JPMorgan analysts suggest that a Trump win may bolster retail investment in bitcoin and gold. According to a Wednesday report, retail investors have increasingly leaned into what is termed the "debasement trade" by purchasing bitcoin and gold ETFs.
The report observed heightened retail activity, not only in bitcoin and gold ETFs but also in “meme and AI tokens,” with these tokens surpassing others in market performance. The analysts noted significant inflows into bitcoin ETFs, with retail investors injecting $1.3 billion in just two days, raising October's total to $4.4 billion—the third-highest monthly inflow since January. However, institutional investors show more restraint, with the analysts cautioning about potential vulnerabilities due to overbought bitcoin futures. Similarly, while retail investors are actively purchasing gold ETFs, institutional interest in gold futures has recently slowed.
The analysts remain optimistic, suggesting that inflation concerns, macroeconomic uncertainty, and increased retail trading could drive growth in cryptocurrencies through 2024. They concluded that if a Trump victory spurs retail investors to further engage in the “debasement trade,” there may be additional upside for bitcoin and gold.
On the other hand, JPMorgan CEO Jamie Dimon remains skeptical of bitcoin's value despite the bank’s interest in blockchain and digital assets. In a recent interview, Dimon stated that bitcoin "lacks intrinsic value" and associated it with illegal activities, advocating for more regulation if he were in a governmental role. While JPMorgan supports blockchain and crypto-focused products like ETFs, Dimon personally remains unconvinced about bitcoin as a viable investment.
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