JPMorgan: Gold and Bitcoin have become important investment structures, and devaluation trading will continue to prevail

According to JPMorgan's report, both gold and BTC have gained significant positions in investors' portfolios due to the prevalence of devaluation trades. BTC saw a capital inflow of $78 billion in 2024. With the policies following Trump's victory, safe-haven assets such as BTC and gold will benefit. The report suggests that this trend will continue into 2025.

Depreciation trading continues to prevail

In October last year, JPMorgan proposed a 'debasement trade'. Analysts said that this debasement trade is driven by multiple factors, including increasing geopolitical uncertainty since 2022, persistent inflation concerns, massive government deficits in major economies, and weakened confidence in fiat currencies, especially in some emerging markets.

Due to the prevalence of devaluation trading, both gold and BTC have gained structural importance in investors' portfolios.

The 26% increase in gold prices over the past year far outpaced the trends suggested by changes in the dollar and actual bond yields, and may reflect the resurgence of this devaluation trade. The record capital inflows into the crypto market in 2024 also indicate that BTC is becoming a 'more important component' in investors' portfolios.

The proportion of gold in the assets of non-bank investors is increasing.

According to The Block's report, the structural rise of gold in investors' portfolios is evident. This includes physical gold, gold ETFs, and other investment tools, which currently account for a significant proportion of the total assets held by non-bank investors worldwide.

BTC saw a capital inflow of $78 billion in 2024.

BTC is also becoming an increasingly important part of investors' portfolios. JPMorgan analysts have called 2024 a pivotal year for the cryptocurrency market, estimating a record $78 billion inflow into the sector. This includes:

Cryptocurrency fund net inflows of 27 billion US dollars (down 17 billion US dollars to reflect the shift from centralized exchange crypto wallets to more cost-effective and liquid spot BTC ETFs)

Investing $14 billion in CME futures

A $14 billion venture capital fund raised through cryptocurrency

MicroStrategy purchased $2.2 billion and BTC miners purchased $1 billion of BTC

Just the BTC purchase volume of MicroStrategy alone accounts for 28% of the total capital inflow into the cryptocurrency market in 2024.

(Understanding MicroStrategy from Zero: The Transformation Journey from Business Intelligence (BI) to the BTC Empire)

Analysts believe that as both gold and Bitcoin gain structural importance, the devaluation trade will continue. Previously, JPMorgan also issued a report stating that Trump's victory boosted the rise of Bitcoin, and with the following policies, safe-haven assets such as Bitcoin and gold will benefit. The "Trump trade" effect will continue until 2025.

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