Bitcoin and Gold May Soar Next Week, According to JP Morgan

Analysts at JP Morgan, the largest bank in the United States, project that a victory by Donald Trump in the next presidential elections in that country could act as an upward catalyst for the price of gold, bitcoin (BTC) and the rest of the cryptocurrencies.

Specialists argue that “retail investors seem to be adopting ‘devaluation trading’ more strongly by buying BTC and gold ETFs.”

Devaluation trade is defined as an investment strategy to protect or benefit from uncertainty and expectations of economic instability. That is why they say they are migrating part of their holdings towards assets such as gold or bitcoin, which do not depend on the decisions of governments or central banks.

Both the precious metal and the digital currency created by Satoshi Nakamoto are in short supply, which facilitates its price increase in response to demand in the long term. In the case of digital currency, it has a limit of 21 million, which differentiates it from fiat money that is constantly devalued by central banks.

For JP MorganAdditionally, retail momentum “is seen in meme and AI tokens, whose market capitalization has outperformed.”

As CriptoNoticias already explained, memecoins pay tribute to pets, political figures and celebrities. Generally, They are used by investors for financial speculation and that is why their price can go down or up in a matter of seconds.for no reason.

Now it is worth asking why the presidential elections of the United States and A victory for Donald Trump increases the expectations of financial markets and, according to JP Morgan, of retail investors.

While it is true that the Republican candidate and his opponent, Kamala Harris (Democrat), have expressed a position in favor of BTC and cryptocurrencies, the former president of the United States promised friendly regulation and growth opportunities to different actors in the sector and the market seems to be leaning towards his victory. According to Polymarketa cryptocurrency betting platform, Trump has a significant lead over Harris less than a week before the start of the electoral race.

In a report, Grayscale, a cryptocurrency exchange-traded fund (ETF) issuing firm, highlights that Polymarket has the potential to be “a source of truth.”

Entries into BTC and gold ETFs

Likewise, JP Morgan specialists They highlighted the performance that gold and bitcoin ETFs have been having one week before the elections in the United States. They point out:

“Overall, to the extent that a Trump victory inspires retail investors not only to buy risky assets but also to further embrace ‘devaluation trading,’ there could be a further upside to bitcoin and bitcoin prices.” “gold in a Trump victory scenario.”

Specialists from JP Morgan, the largest bank in the United States.

Thanks to the good performance that bitcoin ETFs have been having in recent days, the price of the digital asset has generally remained above $70,000. At the time of publication of this note, its price is $70,230.

By simple law of supply and demand, the good performance of exchange-traded funds based on BTC It has a direct impact on the price of the asset.

The thing is that, due to their operation, the companies that manage these financial instruments need to have the digital asset in their treasuries to maintain adequate support for their funds. If there is demand for ETFs, Firms must buy BTC and that causes the price to rise.

Bullish outlook for bitcoin in the short term

In addition to the presidential elections, it should be noted that this Thursday the personal consumption expenditure index (PCE) of the main economic power was published. It is an important indicator that measures the variation in the prices of goods and services purchased by households in that country.

For the United States Federal Reserve (Fed), the indicator serves to define future monetary policy, that is, interest ratessince it is a more precise metric than the consumer price index, which calculates the price variation of a range of specific products.

This Thursday it was known that the PCE recorded a decrease from 2.2% to 2.1%the same line as the projections. Meanwhile, core PCE rose a previously forecast 2.7% year-over-year, slightly above forecasts of 2.6%.

For its part, according to data from the US Department of Labor, Initial jobless claims fell to 216,000below expectations of 230,000, and the four-week average fell to 236,500.

The data reflect that economic activity in the United States shows signs of moderate growth in income and control of inflation. At the moment, BTC and the financial markets did not register an increase in its price.

However, in the future, the indicators mentioned above can bring good news for the markets since based on this data, The Fed could announce a new interest rate cut. Currently it is 5% annually.

In low interest rate contexts, Treasury bond yields fallknown for being “the safest investment in the world.” That is why investors often move their holdings to assets considered risky such as stocks, BTC and cryptocurrencies, with the aim of obtaining greater profits.

Clarification: This article is written for informational purposes. It does not constitute an investment recommendation or financial advice.