On January 5, PANews reported that JPMorgan analysts stated that Bitcoin and gold are structurally becoming key components of investors' portfolios. JPMorgan analyst Nikolaos Panigirtzoglou wrote in a report: 'Over the past year, the rise in gold prices has far exceeded the trends implied by changes in the dollar and real bond yields, likely reflecting a re-emergence of this 'devaluation trade.' They also added that, at the same time, record capital inflows into the crypto market in 2024 indicate that Bitcoin is also becoming a 'more important component' in investors' portfolios.
The devaluation trade refers to a strategy where investors turn to assets like gold and Bitcoin to hedge against the devaluation of fiat currencies, which is typically driven by factors such as inflation, rising government debt, and geopolitical instability.
Analysts noted that the structural growth of gold in investors' portfolios is evident from the amount of gold held by central banks and private investors. This includes physical gold, gold ETFs, and other investment instruments, which currently constitute a significant portion of the total assets held by global non-bank investors.
Overall, analysts believe that as the structural importance of gold and Bitcoin continues to rise, the devaluation trade will persist. In October of last year, analysts were optimistic about the development of cryptocurrencies by 2025, citing factors such as the devaluation trade and increasing institutional adoption.
