Category: forex

If Donald Trump wins the United States presidential elections in November, the trend could accelerate, according to the report.

Investors are turning toward gold and Bitcoin
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in a so-called “debasement trade” as they brace for a “catastrophic scenario” amid rising geopolitical tensions, according to an Oct. 3 report by JPMorgan.

“[R]ising geopolitical tensions and the coming [United States] election are likely to reinforce the ‘debasement trade’ thus favoring both gold and Bitcoin,” according to the report, which JPMorgan shared with Cointelegraph.

The so-called ‘debasement trade’ refers to a spike in gold demand caused by factors ranging from “structurally higher geopolitical uncertainty since 2022,

to persistent high uncertainty about the longer-term inflation backdrop, to concerns about […] persistently high government deficits across major economies,” among others, JPMorgan said.

Spiking open interest on BTC futures on the Chicago Mercantile Exchange (CME) suggests

“speculative institutional investors such as hedge funds might see gold and Bitcoin as similar assets,” according to the report.

Net open interest on CME BTC futures has risen from approximately 10,000 contracts at the start of 2024 to upward of 40,000 as of Oct. 1.

“In addition, the fact that Bitcoin [exchange-traded funds] started seeing inflows again in September after an outflow in August suggests that retail investors might also see gold and Bitcoin in a similar fashion,” according to the report.

Cryptocurrency ETFs saw inflows of more than $20 billion in 2024, according to data from fund researcher Morningstar.

The US Securities and Exchange Commission (SEC) greenlighted spot BTC and Ether
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ETFs in January and July, respectively.

The “debasement trade” could become even more pronounced if Republican US presidential nominee Donald Trump prevails in November’s elections, claimed the report.

“A Trump win in particular, apart from being supportive of Bitcoin from a regulatory point of view, would likely reinforce the

“debasement trade” both via tariffs (geopolitical tensions) and via an expansionary fiscal policy (“debt debasement”),” the report said.

Trump has courted the crypto industry with promises to “fire” the SEC’s chairman, Gary Gensler, and make the US the “crypto capital of the world.”

Economist and podcast host Suze Orman is bullish on Bitcoin but said ETFs are the way to go.

Financial adviser Suze Orman, a best-selling author and host of the Women & Money podcast, recently discussed why everyone should own Bitcoin and how the next generation of investors could define the future of cryptocurrency.

Orman’s comments came during a recent interview with her former employer, CNBC. She hosted the Suze Orman Show from 2002 to 2016, which was among the network’s most highly rated finance-oriented programs.

During the interview, Orman bucked the trend set by her contemporaries in the financial advisory industry and recommended that everyone invest in Bitcoin
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In he interview, Orman said:

“As younger people make more money and mature, [Bitcoin] will be one of their investments of choice, and that will cause it to go up.”
Semi-bullish
While her bullishness extends to having Bitcoin in her own portfolio, she did show some trepidation, stating that she’s only invested via Bitcoin exchange-traded funds (ETFs).

“I don’t think it will ever be a currency or a store of value,” Orman lamented, “but because the younger generation has a fascination

with it — and you see the energy — a whole lot of people having interest in it,” she added, “eventually it could very well catch fire.”

Orman explained that she feels better owning an ETF “because I would never want to see an FTX happen again.” Orman added that she’d “never understand how the wallets work and how if you lose your passcode, you never get it again.”

Ultimately, however, Orman’s message was clear. As she told CNBC, “Everybody should absolutely have exposure to Bitcoin.”

She does, however, caution that holders “gotta be OK with losing that money” and advises that traders only invest as much as they can afford.