JPMorgan: Bitcoin to benefit from Trump's presidency and MicroStrategy's follow-on investment plan
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JPMorgan: Bitcoin to benefit from Trump's presidency and MicroStrategy's follow-on investment plan
With Trump winning the U.S. presidential election, JPMorgan analysts expect both gold and bitcoin to perform well, highlighting the "de-dollarization trade." The "de-dollarization trade" refers to an investment strategy that benefits from currency depreciation or weakness, typically driven by inflation or expansionary fiscal policy. In this trade, investors buy assets such as gold and bitcoin, which are seen as stores of value capable of preserving worth even as currency purchasing power declines. According to The Block, the JPMorgan team wrote in a Wednesday report: "The de-dollarization trade could be reinforced by tariffs, geopolitical tensions, and expansionary fiscal policy ('debt devaluation')." The team is led by managing director Nikolaos Panigirtzoglou. "We do not view the initial negative market reaction in gold following Trump’s victory as a rejection of the de-dollarization trade. After all, bitcoin—one other component of the de-dollarization trade—rose after Trump’s win." When asked whether JPMorgan has a 2025 price target for bitcoin, Panigirtzoglou said, "We are positive on bitcoin for 2025," but declined to provide a specific price target. Analysts noted that retail investors are also supporting both gold and bitcoin, with increased investments in gold and bitcoin ETFs since last summer. They added that this trend is expected to continue into 2025, and Trump’s policies may support both assets. Besides Trump’s policies, bitcoin...
Navigating Web3 tides with focused insightsTechFlow news, November 7 — According to The Block, following Donald Trump's victory in the U.S. presidential election, JPMorgan analysts expect both gold and bitcoin to perform well, highlighting the "devaluation trade."
The "devaluation trade" refers to an investment strategy that benefits from currency depreciation or weakness, typically driven by inflation or expansionary fiscal policies. In this trade, investors buy assets such as gold and bitcoin, which are seen as stores of value capable of maintaining their worth even as the purchasing power of currencies declines.
"The devaluation trade could be reinforced by tariffs, geopolitical tensions, and expansionary fiscal policy ('debt devaluation')," wrote JPMorgan analyst Nikolaos Panigirtzoglou and his team in a report on Wednesday. "We do not view the initial negative market reaction in gold following Trump’s win as a rejection of the devaluation trade. After all, bitcoin—another component of the devaluation trade—rose after Trump’s victory."
When asked whether JPMorgan has a price target for bitcoin in 2025, Panigirtzoglou said, "We are constructive on bitcoin for 2025," but declined to provide a specific price forecast. The analysts noted that retail investors are also supporting both gold and bitcoin, with increased investments into gold and bitcoin ETFs since last summer.
They added that this trend is likely to continue into 2025, and that Trump’s policies could support both assets. Beyond policy impacts, the analysts believe bitcoin could receive further momentum from MicroStrategy, which has announced an aggressive bitcoin acquisition plan through its "21/21 initiative."
The initiative involves raising $42 billion over the next three years, half ($21 billion) through equity and the other half ($21 billion) via fixed-income securities. "MicroStrategy alone could allocate $10 billion to bitcoin in 2025—roughly equivalent to its total cumulative purchases since mid-2020," the analysts stated.
