With Trump's victory in the US presidential election, JPMorgan's analysts expect both gold and Bitcoin to perform well, and have emphasized the "currency devaluation trade".
The "currency devaluation trade" refers to an investment strategy that benefits from currency devaluation or weakness, often due to inflation or expansionary fiscal policies. In this trade, investors buy assets such as gold and Bitcoin, which are seen as stores of value, so that their value is maintained even if the purchasing power of the currency declines.
JPMorgan's analyst team wrote in a report on Wednesday: "The 'currency devaluation trade' may be reinforced by tariffs, geopolitical tensions, and expansionary fiscal policy ('debt debasement')." The team is led by Managing Director Nikolaos Panigirtzoglou. "We don't think the initial negative market reaction of gold after Trump's victory is a rejection of the 'currency devaluation trade'. After all, Bitcoin, as another component of the 'currency devaluation trade', has risen after Trump's victory."
When asked if JPMorgan has a price target for Bitcoin in 2025, Panigirtzoglou said, "We are optimistic about Bitcoin in 2025," but declined to provide a specific price target.
Analysts point out that retail investors are also supporting gold and Bitcoin, with increased investment in gold and Bitcoin ETFs since last summer. They added that this trend will continue until 2025, and Trump's policies may support these two assets.
Analysts said that in addition to Trump's policies, Bitcoin may also receive further impetus from MicroStrategy. MicroStrategy has announced an aggressive Bitcoin acquisition plan through its "21/21 Plan". The plan involves raising $42 billion in the next three years, half ($ 21 billion) from equity and half ($ 21 billion) from fixed-income securities. "By 2025, MicroStrategy will invest $10 billion in Bitcoin, which is roughly equivalent to the total amount it has accumulated since mid-2020," the analysts said. (The Block)
