JPMorgan's Insights on Bitcoin and Gold
Investing.com — JPMorgan strategists noted on Thursday that Bitcoin and gold may experience significant gains if former President Donald Trump wins the upcoming U.S. election. Retail investors are increasingly adopting the "debasement trade," which focuses on protecting against potential currency devaluation by investing in these assets.
JPMorgan stated, "Retail investors appear to be embracing the ‘debasement trade’ in an even stronger manner by buying bitcoin and gold ETFs."
Spot Bitcoin ETFs have seen impressive inflows, with over $1.3 billion entering these funds in just the last two days. October has recorded inflows of $4.4 billion, making it the third-largest month for net inflows since the ETFs launched in January.
The increased interest from retail investors also extends to meme and AI-based tokens, which have outperformed in terms of market capitalization recently.
Regarding gold, JPMorgan observed a similar trend, with retail-driven inflows into gold ETFs while institutional investors remain cautious about new futures positions.
According to the bank, "there could be additional upside for bitcoin and gold prices in a Trump win scenario," as this would likely encourage more retail investment in assets viewed as hedges against currency devaluation.
The note emphasizes the current market stance, showing that credit markets are more likely to price in a Trump victory, unlike equities, rates, or FX markets. If Trump wins, JPMorgan anticipates short-covering and position unwinding across various assets, potentially enhancing liquidity and driving up financial asset prices further.
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