Experts at JPMorgan are confident in the 'good results' of the first cryptocurrency and gold during Donald Trump's presidency in the USA, reports The Block.
The hedging strategy against devaluation mentioned in the analysts' report will likely be 'reinforced by both tariffs and geopolitical tensions, as well as expansionary fiscal policy.'
"We do not consider the initial negative reaction of gold as a rejection of the strategy of hedging against the depreciation of national currencies in the event of Trump's victory. Ultimately, bitcoin, as a key element of this approach, demonstrated growth," noted researcher Nikolaos Panigirzoglou.
Will the rally continue?
According to analysts at JPMorgan, the dynamics of gold purchases by central banks will have a key influence on the further trajectory of its quotes.
Experts emphasized that monetary regulators in many countries significantly increased their holdings of the precious metal in 2022 after the start of the armed conflict in Ukraine and the imposition of anti-Russian sanctions. In their opinion, the trend towards further diversification of central bank reserves with an emphasis on gold will continue, and the People's Bank of China will play a key role in this process.
JPMorgan is confident that retail investors will also show high demand for both assets, including through ETFs. The trend fueled by Trump's policies will continue into 2025.
The MicroStrategy Effect
Another driver of growth for digital gold will be the 'Plan 21/21', aimed at attracting MicroStrategy $42 billion over the next three years. It is expected that the funds received in equal shares in the form of stock and through the placement of debt securities will go towards further increasing bitcoin reserves.
"Only in 2025 will MicroStrategy invest $10 billion in the first cryptocurrency, which approximately corresponds to its cumulative purchases since mid-2020!" analysts emphasized.
The chart below shows the projected dynamics of debt growth and bitcoin reserves of the company founded by Michael Saylor:
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