JPMorgan predicts negative impact of rising popularity of bitcoin on gold
Gold may lose its attractiveness in the long term due to the growing interest of institutional investors in Bitcoin. This opinion was expressed in a new report by analysts of the investment bank JPMorgan, quoted by Bloomberg..
“The spread of Bitcoin among institutional investors has just begun, while gold is already very widespread among them,” writes Nikolaos Panigirtzoglu, head of quantitative strategies at JPMorgan..
Analysts have found that $ 7 billion has been withdrawn from gold ETFs since October.The Grayscale Bitcoin Trust has raised $ 2 billion during the same time, with the volume of assets in it exceeding $ 10 billion..
JPMorgan expects the current trend to continue and its impact on the gold price. Gold accounts for 3.3% of the assets of family wealth management companies, while Bitcoin only accounts for 0.18%, they calculated. Bitcoin, as the largest cryptocurrency, has a capitalization of $ 343 billion – a relatively small number amid more than $ 10 trillion in gold. In other words, the outflow of capital from gold to bitcoin can become a factor in the growth of the cryptocurrency rate..
“If this long-term thesis turns out to be true, the price of gold will suffer due to structural opposition in the coming years,” analysts write, advising clients to purchase one unit in Grayscale and sell three units in SPDR Gold Trust..
The impact of the changes described by JPMorgan is already being confirmed in the market. At the current price of $ 1,856, gold is down 1.5% qoq, while bitcoin is up 70%.
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