According to
The Block report, JPMorgan analysts say that as the US election approaches, retail investors have started flocking to Bit. They predict that a victory for Donald Trump could further boost the upward momentum of Bit, driven by the so-called "devaluation trade" among retail investors.
The analyst team led by JPMorgan managing director Nikolaos Panigirtzoglou wrote in a report on Wednesday:
"Retail investors appear to be embracing the 'devaluation trade' more forcefully by buying Bit and gold ETFs. This retail frenzy is also reflected in meme and AI tokens, whose market capitalizations have outperformed the broader market."
In just October 28-29, the net inflows into Bit spot ETFs reached $1.3 billion, bringing the total inflows in October to $4.4 billion, the third-highest monthly inflows since the launch of Bit spot ETFs in January. Analysts believe that retail interest in alternative assets as a hedge against currency devaluation has driven this surge in inflows.
On the other hand, analysts cite their Bit futures positioning proxy indicator (based on changes in the aggregate open interest of the daily-adjusted CME Bit futures contracts) to point out that institutional investors have essentially paused their Bit futures activity in recent weeks. Analysts said: "Bit futures have become quite overbought, which could lead to some fragility going forward."
Analysts also note that gold ETFs continue to attract inflows, likely also driven by retail investors, while institutional participation in gold futures has similarly paused. Analysts concluded:
"Overall, if a Trump victory were to unleash not just a retail investor embrace of risky assets but also a further embrace of the 'devaluation trade', then Bit and gold prices could have additional upside in a Trump victory scenario."
In a
report published in mid-October, JPMorgan analysts were bullish on the development potential of the crypto market by 2025, mentioning factors such as the growing devaluation trade and the possibility of Trump being re-elected.
