JPMorgan Questions Bitcoin as “Digital Gold” Narrative

• JPMorgan questions Bitcoin narrative.
• Gold gains strength in “devaluation trade”.
• Gold ETFs attract more investment.

In a scenario of economic uncertainty, gold is re-emerging as a safe haven asset preferred by some investors and experts, challenging the narrative of Bitcoin as “digital gold”. According to information shared by the According to JPMorgan analysts The Block, led by Nikolaos Panigirtzoglou, this narrative has come under notable pressure amid stronger gold demand.

Experts have pointed to gold's resilience in the so-called "devaluation trade," an investment strategy that seeks protection against inflation and devaluation of fiat currencies.

“Bitcoin’s volatility and correlation with equities raise questions about its ‘digital gold’ narrative,” they noted. “Looking ahead, we see gold continuing to rally as the primary beneficiary of the bearish trade.”

The report revealed a significant shift in investor behavior. While gold exchange-traded funds (ETFs) have been attracting steady inflows, Bitcoin ETFs have been seeing outflows over the past two months. Additionally, Bitcoin futures positions have turned negative, indicating a growing disinterest in the asset.

According to projections by JPMorgan analysts, around US$9 trillion, or 3,5% of global financial assets, are allocated to gold, reflecting the intensification of the “devaluation trade” and the search for safety in times of uncertainty.

Gold vs. Bitcoin: White House weighs trade-off, could reshape future of finance

The White House is considering a bold proposal: swapping part of the United States’ gold reserves for Bitcoin (BTC). The swap could boost cryptocurrency market prices, taking BTC to a new level amid increased confidence in the asset’s future.

The idea gained traction following statements by Bo Hines, executive director of the President’s Council of Advisors on Digital Assets. In a recent interview, Hines suggested that selling gold reserves could be a budget-neutral way to increase the U.S.’s Bitcoin reserves.