Bitcoin, Gold Could Rally on Trump Election Win Amid Retail ‘Debasement Trade’ Surge: JPMorgan
2024-11-01

Analyst at JPMorgan Chase have suggested that if U.S. Presidential candidate Donald Trump wins the elections, both Bitcoin and gold could see additional upside as retail investors embrace the “debasement trade.”
In a recent report, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou wrote that retail investors “appear to be embracing the debasement trade in an even stronger manger by buying bitcoin and gold ETFs.”
As The Block reported, spot Bitcoin exchange-traded funds (ETFs) have seen significant net inflows over the past few days, which brought their October inflows to $4.4 billion, making it the third-largest month for Bitcoin ETF inflows.
The analysts note these inflows are fueled by retail interest in alternative assets and as a hedge against currency debasement, while institutional investors have paused their BTC futures activity in recent weeks based on their Bitcoin futures position proxy, which is based on cumulative open interest changes on the institutional exchange CME.
Indeed, a report form Binance Research has shown that demand for BTC ETFs has been primarily driven by individual investors, who account for 80% of market activity. The report, however, details institutional interest grew by 30% since the first quarter of the year.
As CryptoGlobe reported, spot Bitcoin ETFs have seen their net inflows surpass $23 billion so far this year, with BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) leading the charge.
Some analysts attribute Bitcoin’s recent price rises with U.S. Presidential candidate Donald Trump leading in election markets when it comes to election odds. Trump has taken a pro-crypto stance during this election cycle, going as far as saying there’s never been anything like Bitcoin.
JPMorgan’s report also details gold ETFs have been seeing inflows that are likely driven by retail investors, with institutional participation in the gold futures market halting as well. It reads:
Overall, to the extent a Trump win inspires retail investors to not only buy risk assets but to also further embrace the ‘debasement trade’, there could be additional upside for bitcoin and gold prices in a Trump win scenario.
Notably, demand for gold has reached a historic milestone in the third quarter, surpassing $100 billion for the first time, according to a new report from the World Gold Council (WGC), in a surge fueled by geopolitical tensions and a flight to safe-haven assets, propelled the precious metal to record-breaking prices.
Total gold demand rose 5% year-over-year to 1,313 metric tons, with its value surging by a staggering 35%. The gold rush has been so strong that gold funds saw an influx of $3 billion last week.
Featured image via Unsplash.