JPMorgan: Gold and Bitcoin become important parts of investment portfolios, the theme of 'hedging against devaluation' continues to heat up

JPMorgan analysts say that 'anti-devaluation trading' is no longer a thing of the past, as both gold and BTC have gained structural importance in investors' portfolios.

The analysis team led by Nikolaos Panigirtzoglou at JPMorgan said in a report:

The price of gold has risen far more in the past year than the trends implied by the US dollar and changes in actual bond yields, and may reflect the resurgence of this 'anti-devaluation trade'.

They said that the cryptocurrency market is poised to see record inflows in 2024, indicating that BTC is becoming a "more important component" in investors' portfolios.

"Debasement Trade" refers to an operational strategy where investors turn to assets such as gold and BTC to hedge against the depreciation of fiat currencies. The depreciation of fiat currencies is usually caused by factors such as inflation, rising government debt, or geopolitical instability.

According to analysts at JPMorgan, the structural rise of gold in investors' portfolios is evident when looking at the amount of gold held by central banks and private investors (for investment purposes). Gold investments include physical gold, gold ETFs, and other investment tools, and they make up a significant portion of the total assets held by non-bank investors worldwide.

In addition, BTC is gradually becoming an important part of investors' portfolios. JPMorgan analysts have stated that 2024 is a "turning year" for the cryptocurrency market, with estimated inflows into the cryptocurrency space reaching a record $78 billion.

Among them, there was a net inflow of $27 billion into cryptocurrency funds (adjusted down by $17 billion to reflect the flow of cryptocurrencies from centralized exchanges to cost-effective and liquid BTC spot ETFs); $14 billion invested in CME futures; $14 billion raised by cryptocurrency venture capital funds; and MicroStrategy's purchase of $22 billion in BTC and mining companies' purchase of $1 billion in BTC.

Analysts point out that MicroStrategy's BTC purchase alone accounts for 28% of the total inflow of funds into the cryptocurrency market in 2024.

Analysts say that overall, as both gold and BTC gain structural importance, the theme of hedging against depreciation will continue to be maintained. In October last year, analysts were optimistic about the trend of cryptocurrencies in 2025, supported by factors such as hedging against depreciation trading and continued institutional adoption.

<Morgan Stanley: Gold and Bitcoin Becomes Important Part of Investment Portfolio, "Devaluation Trading" Theme Continues> This article was first published in "Block Times".