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Analysts of the banking giant JP Morgan opined that institutional investors might withdraw from Bitcoin and turn their sight back to gold as the price of the primary cryptocurrency collapsed.
Back to Gold
The turbulent times for cryptocurrencies caused some analysts to doubt bitcoinâs merit as a store of value. According to JP Morgan experts, the recent crash of Bitcoin can reflect on the entire financial world. They seem to believe that many investors will panic-sell their BTC holdings to replace them with gold â the traditional store of value.
While BTCâs price sunk to $30,000, the value of the yellow metal became very tempting, rising by 6% since the beginning of May.
However, the chief commodity strategist at Bloomberg â Mike McGlone â took a different stance from the forecast of JP Morganâs experts. He also emphasized goldâs bull run but predicted that bitcoin will be capable of enduring its power:
âItâs a Gold Bull Market. Goldâs 20% discount to its 2020 record high is sufficient for a resumption of a bull market for the metal, as we see it, but store-of-value newcomer Bitcoin is likely to remain a headwind to its upside.â
Change of Heart for JP Morgan
Itâs worth noting that this is yet another u-turn on their stance. In November 2020, JPM experts predicted that the competition between bitcoin and gold could lead to a 10x increase in the price of the primary cryptocurrency. According to a report, giant multinational investment banks preferred to allocate their funds into BTC rather than the yellow metal resulting in a massive surge in the digital assetâs value.
On another occasion in December 2020, the US banking institution shared completely opposite thoughts on the relation between the two assets. JPM stated that institutional investors started a wealth transfer from gold ETFs towards the primary cryptocurrency.
Moreover, the bank analysts highlighted that allocating funds from gold to BTC will ârepresent the transfer of billions of cash.â They further asserted that the precious metal will suffer because of bitcoin:
âThe adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.â
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.