JPMorgan analysts believe that retail demand for bitcoin and gold could surge if Trump is likely to win, although institutional investors remain cautious in the context of overbought futures.

Bitcoin, Gold Prices Set to Rise? JPMorgan Considers Potential Driven by Trump

JPMorgan analysts, led by executive Nikolaos Panigirtzoglou, pointed out in a report on Wednesday that the possibility of Donald Trump winning the upcoming U.S. presidential election could increase retail interest in bitcoin and gold. They noted:

Retail investors seem to be embracing 'arbitrage trading' in a stronger way by purchasing bitcoin and gold ETFs.

They have observed significant retail activity, not only in bitcoin and gold exchange-traded funds (ETFs) but also in "meme tokens and AI with outstanding market capitalization."

Analysts have highlighted a significant increase in capital inflows into bitcoin ETFs, with retail investors adding $1.3 billion in just two days, bringing the total for October to $4.4 billion — marking the third-highest monthly inflow since January. Despite this increase, institutional investors remain more cautious. Analysts have warned that "Bitcoin futures BTC +0.39% have become overbought, creating some gaps in the future," indicating a slowdown in institutional demand for bitcoin futures. Similarly, while retail investors are actively buying gold ETFs, institutional interest in gold futures has shown a notable pause.

JPMorgan analysts reflect optimism that macroeconomic uncertainties, inflation concerns, and the outlook for increased retail trading could support the growth of cryptocurrencies into 2024. They conclude:

Overall, if Trump's victory inspires retail investors to not only buy risk assets but also continue engaging in 'arbitrage trading,' the prices of bitcoin and gold could rise further in the scenario of a Trump election win.

Meanwhile, JPMorgan CEO Jamie Dimon remains skeptical about bitcoin, although the bank is more interested in blockchain and digital assets. In a recent interview, he argued that bitcoin "has no value." Dimon has also linked bitcoin to illegal activities and has voiced support for stricter regulation if he holds a role in government. While JPMorgan supports blockchain initiatives and cryptocurrency products like ETFs, Dimon himself continues to criticize bitcoin as an investment.

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