JPMorgan Analysts See Potential Trump Win as Catalyst for Bitcoin Surge Amid "Debasement Trade"
With the U.S. election approaching, JPMorgan analysts suggest that a possible victory for Donald Trump could spark fresh momentum for bitcoin, fueled by what they call the “debasement trade” among retail investors. JPMorgan Managing Director Nikolaos Panigirtzoglou highlighted the trend, noting a shift among retail investors toward assets like bitcoin and gold ETFs as hedges against currency instability.
"Retail investors seem to be reinforcing the 'debasement trade' approach, increasingly favoring assets such as bitcoin and gold ETFs," Panigirtzoglou observed in a recent report. This shift isn't exclusive to bitcoin; meme coins and AI tokens have also gained traction, with market caps surpassing other asset classes.
In the last two days, bitcoin spot ETFs have experienced a remarkable $1.3 billion in net inflows, bringing October’s total to $4.4 billion. This influx ranks as the third-largest monthly inflow for bitcoin ETFs since their inception, underscoring a retail-driven demand for financial hedges.
In contrast, institutional interest has dipped, with CME bitcoin futures contracts indicating a slowdown in activity. Analysts noted that "bitcoin futures have reached overbought levels, suggesting potential downside risks." Similarly, gold ETFs have maintained steady inflows, primarily driven by retail, while institutional interest in gold futures has stalled.
JPMorgan’s analysts concluded that a Trump victory could further invigorate retail interest in bitcoin and gold, expanding the "debasement trade" and supporting potential growth in these assets.
Earlier in October, JPMorgan projected a bullish outlook for cryptocurrency by 2025, citing the debasement trade’s growing influence and the potential impact of Trump’s return as possible growth accelerators for the sector.
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