JPMorgan analysts released a report on Friday stating that the rise in gold prices over the past year has far exceeded the movements in the US dollar and real bond yields, which may reflect the resurgence of the "debasement trade", and the record capital inflows into the cryptocurrency market in 2024 indicate that Bitcoin is also becoming a more important component of investors' portfolios.
The debasement trade refers to the strategy of investors hedging against the devaluation of fiat currencies by investing in assets such as gold and Bitcoin, which is usually driven by factors such as inflation, rising government debt, and geopolitical instability.
The analysts stated that the structural growth of gold in investors' portfolios can be seen from the amount of gold held by central banks and private investors for investment purposes, and Bitcoin is similarly becoming an increasingly important part of investors' portfolios. With the help of Trump's victory, JPMorgan analysts have dubbed 2024 as the "critical year for the cryptocurrency market", estimating a record $78 billion inflow into the market.
This includes $27 billion in net inflows to crypto funds, $14 billion invested in CME futures, $14 billion raised by crypto venture capital funds, $22 billion in Bitcoin purchases by MicroStrategy, and $1 billion in Bitcoin purchases by miners, meaning that MicroStrategy's Bitcoin purchases alone accounted for 28% of the record capital inflows into the cryptocurrency market last year.
JPMorgan estimates that overall, as the structural positions of gold and Bitcoin rise, the debasement trade will continue to exist.
Significant Decline in Total BTC on Exchanges and Miner Outflows
It is worth noting that since November 2024, the inflow of Bitcoin to exchanges (the total amount of Bitcoin transferred to exchanges) and the outflow from miners (the amount of Bitcoin sent to exchanges by miners) have declined significantly, indicating a significant easing of selling pressure.
According to CryptoQuant data, on November 25, 2024, the Bitcoin exchange inflow reached a peak of 98,748 BTC, and by last December, the exchange inflow had declined, but the total amount of Bitcoin flowing into exchanges per day was still between 11,000 and 79,000 BTC.
At the same time, on November 11 last year, the miner outflow reached a peak, with miners transferring 25,367 BTC to exchanges in a single day, but by January 1, 2025, miners were transferring 5,489 BTC to exchanges, and on January 2, this declined to 5,748 BTC, and on January 3, it declined to 2,133 BTC.
With the easing of selling pressure, Bitcoin is expected to continue its upward trend, and Bitfinex analysts today stated that they expect Bitcoin to rise to $105,000 in January, and they expect Bitcoin to fluctuate between $95,000 and $110,000 by the end of January.
