Bitcoin Expected to Rise If Trump Wins, JPMorgan Highlights Retail Interest
JPMorgan analysts indicate that a potential win for Republican presidential candidate Donald Trump could enhance Bitcoin (BTC) price momentum.
Retail Investors Turn To Bitcoin For ‘Debasement Trade’
In a client note, JPMorgan suggested that a Trump victory might lead to increased interest in both BTC and gold, as retail investors view Bitcoin as a means to protect purchasing power against fiat currency erosion caused by extensive money printing.
The M2 money supply, which measures total money in circulation, surged during the coronavirus pandemic, resulting in heightened inflation. The U.S. Federal Reserve responded by raising interest rates.
Retail investors are purchasing BTC to maintain value, anticipating it will serve as a hedge against currency depreciation. The JPMorgan note states:
Retail investors appear to be embracing the ‘debasement trade’ in an even stronger manner by buying bitcoin and gold ETFs. The retail impulse is also seen in meme and AI tokens the market cap of which has outperformed.
Data from SoSoValue indicates that Bitcoin exchange-traded funds (ETFs) have garnered $1.3 billion in inflows over just two days, bringing the cumulative net inflow to US-based spot BTC ETFs to $24.18 billion as of October 30. October's ETF inflows totaled $4.4 billion, marking the third-highest monthly total since their launch earlier this year.
However, institutional investor activity in BTC futures has slowed, with analysts noting that Bitcoin futures are in overbought territory, potentially impacting BTC’s near-term outlook.
The client note emphasizes that credit and prediction markets favor a Trump win, contrasting with equities and foreign exchange markets. Analysts conclude:
Overall, to the extent a Trump win inspires retail investors to buy risk assets and further embrace the ‘debasement trade’, there could be additional upside for bitcoin and gold prices in a Trump win scenario.
Where Is BTC Headed? Analysts Share Their Outlook
Bitcoin is trading within 2% of reaching a new all-time high (ATH), generating optimism among crypto analysts.
Crypto analyst Timothy Peterson forecasts that BTC could rise to $100,000 by February 2025. Additionally, crypto options trading data shows traders expect BTC to reach $80,000 by the end of November 2024, irrespective of the election outcome.
Veteran trader Peter Brandt advises caution, stating that a daily close above $76,000 is necessary to confirm a true breakout. Currently, BTC is trading at $71,798, down 0.1% in the past 24 hours.
