JPMorgan experts have noticed a sharp rise in the popularity of Bitcoin and gold among investors. Why is this happening?
Analysts at banking giant JPMorgan have published another report on what is happening in the world of investments. They noted that investors have started to invest more actively in Bitcoin and gold. These investments now look much more attractive against the backdrop of “catastrophic scenarios” as geopolitical tensions rise in the Middle East. That is, precious metal and crypto can be seen as a kind of devaluation bargain that will protect buyers’ assets in the long term.
Why Buy Bitcoin
The analysts’ report mentions the following thesis, the contents of which are cited by Cointelegraph.
Rising geopolitical tensions and the upcoming US election will surely strengthen the prospects of a devaluation deal, which will favour both gold and Bitcoin.
Hourly gold price chart
The so-called “devaluation deal” means a surge in demand for gold due to various factors – including “structurally higher geopolitical uncertainty from 2022”. Added to this are concerns over the long-term inflationary backdrop, as well as concerns over persistently high government deficits in key economies.
The growing volume of open trades in BTC futures trading also suggests that “speculative institutional investors along the lines of hedge funds may view gold and Bitcoin as similar assets.”
Analysts noted that this figure has grown from around 10,000 contracts in early 2024 to 40,000 as of 1 October. Accordingly, demand for the digital asset is indeed increasing. Here’s the commentary.
In addition, the fact that Bitcoin-based exchange-traded funds started receiving inflows again in September after outflows in August suggests that gold and Bitcoin are likely to be perceived as good investments by retail investors.
Growth in the volume of open positions in Bitcoin futures
In 2024, total inflows into cryptocurrency ETFs totalled more than $20 billion. As a reminder, the US Securities and Exchange Commission (SEC) approved the launch of the Bitcoin-ETF and the Etherium-ETF in January and July, respectively.
Funds flow into spot cryptocurrency ETFs in the US
The devaluation deal could become even more pronounced if Republican US presidential candidate Donald Trump wins the November election. Still, he has been in favour of the digital asset niche since at least the spring, promising to significantly improve the industry’s fortunes.
As he noted in late July during a speech at the Bitcoin 2024 conference in Nashville, his work as president, if he wins, will begin with the firing of Gary Gensler. This is the chairman of the Securities Commission, who is known for his dislike of crypto and regularly causes problems for it. Experts continue.
In particular, Trump’s victory will not only support Bitcoin from a regulatory perspective, but will likely strengthen the devaluation deal through both tariffs and expansive fiscal policy.
Earlier, The Donald voiced other promises for digital asset lovers. We are talking about creating an adequate regulatory framework for the crypto sphere, stopping the sale of confiscated coins by the US government, as well as helping miners by reducing the cost of electricity. Yesterday, Trump repeated his promise to pardon the creator of the Silk Road darknet platform Ross Ulbricht.
He did so on the social media platform Truth Social. In doing so, Ulbricht received a double life sentence and an additional 40 years in prison for his activities. That means he will only be released if the president pardons him.
Former US President Donald Trump at the Bitcoin 2024 cryptocurrency conference
As of today, Trump and Harris’ chances of winning are virtually equal. Users of decentralised platform Polymarket estimate them at 49 and 50 percent respectively.
1 per cent is set aside for the likelihood of another Michelle Obama-type candidate running.
Candidates’ chances of winning the presidential election
Meanwhile, the value of Bitcoin has sagged more than 6 per cent over the past seven days. However, the local collapse of the cryptocurrency should not be perceived as something catastrophic.
Such an opinion was shared on Twitter by Quinn Thompson, investment director at Lekker Capital. He sees the market situation as an opportunity to increase his own coin holdings. Here’s his line.
I don’t usually make very short-term predictions, but it doesn’t seem to make sense not to buy BTC in this zone with a clear pullback amid shifting events in the macro economy compared to the three previous similar sets on the chart.
To his post, Thompson attached a chart of Bitcoin’s price movement since 5 March this year, when BTC hit a new all-time high around $73,700. The latter is a reminder of the cryptocurrency’s ability to recover from sharp drawdowns.
Bitcoin’s value change from March 2024
Thompson highlighted three previous “similar situations” or so-called setups where Bitcoin’s price fell sharply and subsequently dipped well below the 200-day moving average line, a key technical indicator.
This time, however, BTC has rebounded sharply from the said zone. According to Thompson, this indicates the clear invalidity of the bearish scenario on Bitcoin in the short term.
Earlier, a similar vision of what is happening was shared by experts at Standard Chartered bank. In their opinion, the first cryptocurrency should not linger below $ 60 thousand, which is generally consistent with reality so far.
It seems that Bitcoin's position is becoming more confident all over the world. Some investors are now considering the first cryptocurrency as an analogue to the main precious metal. And the launch of spot ETFs on the digital asset in the US earlier this year, which has already attracted billions of dollars in investments, has clearly contributed to this.
More interesting stuff is in our crypto chat. We look forward to seeing you there and hurry up, because this bullrun traditionally won’t last forever, but will end at some point.
Related posts
