According to a report by The Block on January 5, JPMorgan analysts indicate 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 U.S. 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 significant component" of investors' portfolios.
Devaluation trading refers to a strategy where investors turn to assets like gold and Bitcoin to hedge against the devaluation of fiat currencies. This devaluation is typically driven by factors such as inflation, rising government debt, and geopolitical instability.
Analysts state that based on the amount of gold held by central banks and private investors, the structural growth of gold in investors' portfolios is evident. This includes physical gold, gold ETFs, and other investment vehicles, which currently represent a significant portion of the total assets held by non-bank investors globally.
Overall, analysts believe that as the structural importance of gold and Bitcoin continues to rise, devaluation trading will persist. In October last year, analysts held an optimistic view on the development of cryptocurrencies in 2025, citing factors such as devaluation trading and increasing institutional adoption rates.
