Bitcoin Could Soar If Trump Wins: JPMorgan Points to ‘Debasement Trade’
Bitcoin Poised for Gains if Trump Wins, JPMorgan Cites ‘Debasement Trade’ as Key Factor
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A potential victory for Republican presidential candidate Donald Trump could ignite further momentum in the Bitcoin (BTC) price, according to analysts at JPMorgan. Retail investors are increasingly turning to Bitcoin as a ‘debasement trade,’ and a Trump win could amplify this trend, potentially boosting both Bitcoin and gold prices.
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Retail Investors Embrace Bitcoin as Inflation Hedge
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JPMorgan’s recent client note suggests that a Trump win might provide ‘additional upside’ for both Bitcoin and gold, due to retail investors’ growing perception of Bitcoin as a hedge against currency depreciation. This ‘debasement trade’ strategy aims to protect purchasing power against the erosion of fiat currencies caused by excessive money printing.
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The M2 money supply, a measure of total money in circulation, surged significantly during the COVID-19 pandemic. This surge led to heightened inflation, prompting the U.S. Federal Reserve (Fed) to raise interest rates to combat it. Bitcoin has emerged as a potential safe haven for retail investors seeking to preserve their money’s value.
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Bitcoin ETFs See Record Inflows
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Data from SoSoValue reveals that Bitcoin exchange-traded funds (ETFs) have attracted a remarkable $1.3 billion in inflows over just the past two days. As of October 30, the cumulative net inflow to US-based spot BTC ETFs stands at a staggering $24.18 billion. October’s total ETF inflows alone reached $4.4 billion, marking the third-highest month for BTC ETF inflows since their launch earlier this year.
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While retail investors are embracing Bitcoin, institutional investors seem to have slowed down on BTC futures activity recently. Analysts observe that Bitcoin futures have entered overbought territory, potentially creating vulnerability for BTC’s near-term outlook.
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Trump Win Could Drive Further Bitcoin Price Momentum
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JPMorgan’s client note highlights that credit and prediction markets are leaning towards a Trump win, unlike equities, foreign exchange (FX), and rates markets. The analysts conclude that a Trump win, if it inspires retail investors to embrace risk assets and further adopt the ‘debasement trade,’ could lead to additional upside for both Bitcoin and gold prices.
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Bitcoin Nears All-Time High, Analysts Offer Diverse Outlooks
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Bitcoin is currently trading within 2% of reaching a new all-time high (ATH), fueling renewed optimism among crypto analysts. Some analysts, like Timothy Peterson, predict a surge to as high as $100,000 by February 2025.
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Crypto options trading data suggests traders are confident BTC will hit $80,000 by the end of November 2024, regardless of the election outcome. However, veteran trader Peter Brandt urges caution, advising BTC bulls that a daily close above $76,000 is crucial for confirming a true breakout.
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At the time of writing, BTC is trading at $71,798, down 0.1% in the past 24 hours.