Bitcoin, Gold Prices Poised for Upside? JPMorgan Weighs Trump-Driven Potential

JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, indicated in a Wednesday report that a possible Donald Trump win in the upcoming U.S. presidential election could enhance retail interest in bitcoin and gold.

JPMorgan analysts are suggesting that a potential Donald Trump victory in the upcoming U.S. presidential election could lead to a surge in retail demand for bitcoin and gold, although institutional investors are still showing caution due to overbought futures.

In a report on Wednesday, JPMorgan analysts, led by Nikolaos Panigirtzoglou, managing director and global head of thematic research, noted that retail investors are showing a strong interest in the "debasement trade" by purchasing bitcoin and gold ETFs.

The analysts observed a significant level of retail activity, not only in bitcoin and gold exchange-traded funds (ETFs) but also in "meme and AI tokens the market cap of which has outperformed."

They also highlighted a substantial increase in bitcoin ETF inflows, with retail investors adding $1.3 billion in just two days, bringing October's total to $4.4 billion — the third-highest monthly inflow since January.

However, despite this uptick in retail interest, institutional investors are reportedly remaining more cautious.

“Bitcoin BTC +0.39% futures have become rather overbought creating some vulnerability going forward,” the analysts wrote in the note, regarding institutional demand in bitcoin futures, which showed a slowdown.

Similarly, while retail investors are actively buying gold ETFs, institutional interest in gold futures has shown a noticeable pause.

The JPMorgan analysts expressed optimism that macroeconomic uncertainties, inflation concerns, and the prospect of increased retail trading could support cryptocurrency growth through 2024.

They concluded, “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.”

In related news, JPMorgan CEO Jamie Dimon has remained skeptical of bitcoin, despite the bank's broader interest in blockchain and digital assets.

During a recent interview, Dimon stated that bitcoin “doesn't have value.” He has also linked bitcoin to illicit activities and expressed support for stricter regulation if he were in a government role.

While JPMorgan is involved in blockchain initiatives and crypto products like ETFs, Dimon himself remains critical of bitcoin as an investment.