JPMorgan: Bitcoin to take over market shares from Gold
The major investment bank forecasts that Bitcoin will lose market share in the long term to the market leader in value retention.
The growing adoption of Bitcoin (BTC) as a store of value has an immediate impact on gold, which could lead to a shift in the balance of power between the two assets, according to JPMorgan Chase.
Their quantitative analysts, such as Nikolaos Panigirtzoglou, believe that the narrative of Bitcoin as digital gold will attract more and more investors away from the Bitcoin Pro review market-leading precious metal in the coming years, which in turn will cause a significant divergence in the price development of the two financial products.
In this respect, the Bank points out that Bitcoin currently represents only 0.18% of the assets of so-called „family offices“, while 3.3% of the assets of these are invested in gold-based index funds (ETFs). These figures alone show that even a small shift from the precious metal to the crypto currency could have serious consequences for the former.
Accordingly, JPMorgan writes to its clients
„The adoption of Bitcoin by institutional investors has only just begun, while the adoption of gold by institutional investors is well advanced. If this medium to long term thesis is confirmed, then gold will face a structural headwind in the coming year“.
Even beyond the investment bank’s assessment, there is growing evidence that institutional interest in Bitcoin is steadily increasing. The Grayscale asset management company, for example, is seeing record inflows of funds both for its Bitcoin-based investment fund and for the Ethereum (ETH) based investment fund, which means that, together with the payment providers PayPal and Square, it is currently buying more Bitcoin than the miners are mining per day.
The crypto-market researchers at CoinShares also note that the inflowing capital has increased significantly in the last four weeks, with Bitcoin recently attracting $1.4 billion in new money. For gold, on the other hand, a record outflow of US$ 9.2 billion is on the table.
So although Bitcoin has great potential in the long term, the crypto currency is probably overvalued at the moment. Accordingly, many experts assume that selling pressure will soon return.
Yesterday, Wednesday, the Bitcoin exchange rate had already fallen below the USD 18,000 mark, a drop of more than 7%.