A potential victory for Donald Trump in the upcoming November 5 elections in the U.S. could bolster the upward momentum of the price of the first cryptocurrency, reports The Block, citing opinions from JPMorgan analysts.
"Retail investors seem to be increasingly resorting to hedging strategies against devaluation risk by buying bitcoin and gold ETFs," noted experts from the financial conglomerate.
According to them, "retail momentum" is also observed among AI tokens and meme coins — the market capitalization of coins in these segments has "exceeded all expectations."
On the other hand, analysts noted a slight decrease in trading activity of bitcoin futures among institutional investors.
"Futures on the first cryptocurrency have become quite overbought, which creates a certain vulnerability in the future," experts emphasized.
In addition to bitcoin ETFs, there is a steady inflow of funds into gold-based exchange-traded funds. Experts believe this is also due to "retail demand," while "institutional participation is on pause."
"Overall, if Trump's victory inspires retail investors not only to buy risky assets but also to strengthen their positions in hedging strategies against devaluation, this could create additional preconditions for the price growth of bitcoin and gold," analysts concluded.
The former U.S. president seeks to garner the support of crypto users in the upcoming elections. In July, he spoke at the annual Bitcoin 2024 conference in Nashville, promising to fire SEC Chairman Gary Gensler and create a strategic bitcoin reserve.
Earlier, JPMorgan analysts named the main drivers for cryptocurrency growth by the end of the year.
