The upcoming election is heating up, and not just in the political arena. Financial experts are also closely watching the race, with some predicting significant market shifts depending on the outcome. JPMorgan, a leading financial institution, has made a bold prediction: a Trump victory could send Bitcoin and gold prices soaring.
The analysts, led by managing director Nikolaos Panigirtzoglou, believe a Trump win would amplify the ‘debasement trade’ trend. This strategy involves retail investors seeking refuge in assets like Bitcoin and gold ETFs as a shield against potential currency devaluation.
Recent data reveals a surge in interest in Bitcoin, with net inflows into spot Bitcoin ETFs reaching a staggering $1.3 billion in recent days. This adds to a total of $4.4 billion in inflows for October, marking the third-largest monthly influx since Bitcoin ETFs launched in January. While retail investors are driving this bullish trend, institutional investors have taken a step back from Bitcoin futures, with JPMorgan observing a pause in their activity.
The analysts highlight a potential risk: Bitcoin futures have become ‘overbought,’ suggesting a potential for price corrections. Gold ETFs have also seen steady inflows, primarily driven by retail investors. However, similar to Bitcoin, institutional participation in gold futures has also paused.
JPMorgan’s analysis points to a potential domino effect. If Trump wins, the increased retail investor interest in Bitcoin and gold, coupled with a pause in institutional activity, could further drive up prices.
While the prospect of a Trump victory igniting a surge in Bitcoin and gold prices is enticing, some analysts remain cautious about the growth potential in the final quarter of the year. They argue that the conditions necessary for a significant price surge, similar to what was seen in 2021, are currently absent.
However, the cryptocurrency industry is optimistic about a more supportive regulatory environment post-election, regardless of the winner. Industry leaders are bracing for potential shifts in policy that could benefit the sector.
With the election neck and neck, it’s a waiting game for the market. The outcome will determine not just the direction of the political landscape but also the potential trajectory of major assets like Bitcoin and gold.
