The investment strategy known as “devaluation trading” is here to stay and fuels the appetite for safe haven assets such as gold and bitcoin (BTC), which are not exposed to arbitrary issuance and monetary policies of central banks.
This is stated by analysts at JP Morgan, the largest bank in the United States, in their latest report. “The appreciation of the price of gold over the last year has gone far beyond the movements implied by changes in the dollar and in real bond yields, and probably reflects the resurgence of this “devaluation trade,” it stands out. in the studio.
In this context, it is that bitcoin is becoming an “increasingly important component” of investors’ portfolios.
As CriptoNoticias has explained, “devaluation trading” is defined as an investment strategy used by traders seeking to protect themselves or benefit in times of economic uncertainty.
This practice occurs when There are expectations of instability, such as war, rumors of recession or factors that negatively affect the economy and that may promote the inorganic issuance of fiat money.. In these cases, investors transfer part of their assets towards assets such as gold or BTC, which do not depend on the decisions of governments or central entities.
Digital currency is considered by many investors as “digital gold” due to its similarities to the precious metal. Mainly because the digital currency has an inelastic supply, invariably set at 21 million, which makes it a scarce asset. Furthermore, since it is not under the control of any centralized administrator, it is considered a digital commodity.
JP Morgan argues that the currency created by Satoshi Nakamoto is becoming an increasingly important part of investors’ portfolios, based on the record numbers that were recorded in 2024. In an increasingly conflictive geopolitical context, and in which The world’s currencies deepen their inflationary trend, assets like bitcoin increase their attractiveness.
It is estimated that 78 billion dollars They migrated from traditional assets to investment products based on BTC and other cryptocurrencies.
Of that total, $22 billion correspond to MicroStrategy’s BTC purchases, which represent a total of 28% of the money that entered the digital asset market.
Likewise, it is worth highlighting the market launch of exchange-traded funds (ETFs) based on bitcoin in the United States, which from January 2024 to date have accumulated more than $35 billion.
The structural importance of BTC in investors’ portfolios reinforces the position of BlackRock, the largest asset manager in the world, which highlights that The digital currency is a “unique diversifying asset.”
Although it is still in its early stages of adoption as a means of global payment or store of value, specialists maintain that “BTC’s unique characteristics can make it a hedge against risks that traditional assets cannot address, particularly in times of greater uncertainty. geopolitical and economic”.
The financial giant also adds that Inherent scarcity is what generates institutional interest, in times of economic and political instability.
For BlackRock, as more traders “understand and appreciate the “digital gold” nature of bitcoin, it is reasonable to expect them to continue using this tool.” Also consider: “This can sustain or increase the price in the long term.”