The US presidential elections are creating excitement in the cryptocurrency world. JPMorgan analysts suggest that Donald Trump’s victory will create a new momentum for Bitcoin and gold. Analysts expect this surge to be fuelled by growing interest among individual investors, who are turning to assets that can better withstand economic instability.
Individual investors are turning to ‘depreciation trading’!
JPMorgan’s Nikolaos Panigirtzoglou leads the analysis, highlighting a trend he calls ‘depreciation trading’. Accordingly, investors prefer assets such as Bitcoin and gold to protect their money from depreciation. As Trump’s chances strengthened, investors began to see these assets as an effective hedge against the risks associated with traditional currencies.
In this context, analysts say, ‘Individual investors seem to be embracing the “depreciation trade” even more strongly by buying Bitcoin and gold ETFs. These investors are not only protecting their assets, but are also showing a growing interest in alternative investments, including meme coins and AI tokens, which have outperformed other digital assets in market capitalisation.
Record ETF inflows for leading cryptocurrency
Bitcoin ETFs saw $1.3 billion in new inflows in just two days in October. Thus, it recorded a significant increase in demand. It also brought the monthly total to $4.4 billion. This increase was the third highest month for ETF inflows since their debut in January. Hence, this shows a strong wave of interest from smaller investors. This move signals a broader shift, with individual investors increasingly using Bitcoin as a hedge against economic uncertainty and potential weakness in the US dollar.
Institutional investors are cautious
While individual demand increased, institutional interest in Bitcoin slowed down. JPMorgan analysts note that institutional investors are holding back on Bitcoin futures. For this, he cites concerns about overbought conditions in the market. Analysts said in the report, ‘Bitcoin futures were quite overbought. This creates some vulnerabilities going forward,’ they say. Likewise, institutional investment in gold futures has stalled, although individual investors continue to pour money into gold ETFs. This divide reflects the different strategies between individual and institutional investors.
Will Trump’s victory intensify demand for gold and leading cryptocurrency?
JPMorgan analysts emphasise that investors want to protect their assets from economic changes and inflation. Therefore, they predict that the Trump victory will further increase retail demand for Bitcoin and gold. ‘Trump’s win could inspire individual investors not only to buy risky assets, but also to further embrace the ‘depreciation trade’ and potentially provide additional increases for Bitcoin and gold prices,’ the JPMorgan report said.
This forecast also coincides with JPMorgan’s optimistic outlook for the cryptocurrency market. The bank expects the market to grow significantly by 2025. Analysts attribute this potential growth to the ongoing attraction of ‘depreciation trading’. It also refers to possible political changes in the US that will affect investment preferences. As you follow from Kriptokoin.com, the market is closely following the US elections. More individual investors are looking to Bitcoin and gold as a shield against economic uncertainty. It is not yet clear whether Trump’s win will further this trend. But there are exciting possibilities for those in the market.
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