JPMorgan recently released a report on the crypto market, proposing several factors that could drive the growth of cryptocurrencies, including the impact of Trump's election, investor risk-averse behavior, and global geopolitical situations. These factors could potentially increase the market's demand for crypto assets like in 2025.
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ToggleGeopolitics and expectations of US dollar depreciation promote demand for cryptocurrencies
According to The Block, as global geopolitical tensions escalate, especially with the upcoming US presidential election, investors are starting to seek safe-haven assets to hedge against economic uncertainty. JPMorgan stated that and gold will be the main beneficiaries of the "debasement trade", as they are seen as a hedge against US dollar depreciation and are considered to have "store of value" characteristics, while may be less favored as its value fluctuates more due to ecosystem development rather than pure safe-haven demand.
(BTC once fell below 60K, will the "debasement trade" bring a bullish Uptober?)
Trump's election may drive demand for safe haven assets
JPMorgan stated that if Trump is elected, in addition to being more favorable to in terms of regulation, his policies may also strengthen the "debasement trade" trend. This is because Trump's policies may include:
Imposing tariffs to address geopolitical tensions: Trump's policies are usually more hawkish on geopolitics, and he may impose tariffs on trade to counter other countries. This could increase market instability, thereby driving investors to seek safe-haven assets like and gold.
Expansionary fiscal policy: This may involve large-scale government spending, such as on infrastructure, further expanding US debt. As the government increases borrowing and continues to expand spending, the market will be concerned about US dollar depreciation, and investors will tend to shift funds to inflation-resistant assets like gold or to hedge against the weakening purchasing power of the US dollar.
Participation of traditional wealth management companies and the potential of FTX bankruptcy funds flowing back into the market
JPMorgan also mentioned that the potential for market growth could come from asset management companies like Morgan Stanley starting to recommend ETFs to their clients. It further pointed out that the asset liquidation of Mt. Gox and Genesis bankruptcies, as well as the German government's sale of , have now reached a conclusion. The FTX bankruptcy fund liquidation is expected to be completed by the end of this year or early 2025, and these funds may flow back into the crypto market, providing potential support.
(Bankruptcy court approves! FTX will return 119% of claims within 60 days)
Stablecoin market recovery and US regulatory bills driving mainstream adoption
JPMorgan observed that the current stablecoin market capitalization is close to the $170 billion peak before the Terra/Luna collapse, but US stablecoin legislation is still ongoing, and is expected to be passed at the earliest by 2025. Analysts believe that the future release of stablecoin compliance laws will help stablecoins enter the mainstream financial system, and US-compliant stablecoins will have an advantage, while non-compliant stablecoins like Tether may face challenges.
BTC price relatively stable with continuous strengthening of support
According to JPMorgan's observation, the current price is around $67,000, far above its $47,000 cost, indicating that the current price has a relatively high premium, suggesting strong market demand for . After volatility adjustment, the value of relative to gold is in an upward trend. Analysts believe that this price stability and return potential will attract more investors to the crypto market.
