After the 2024 presidential elections, JPMorgan analysts expect that Trump’s return to the White House will benefit Gold and Bitcoin. According to analysts, both assets will gain in the president’s second round.
The surge in Bitcoin to an all-time peak of $76,000 on Wednesday after the Associated Press revealed the vote counts. Moreover, the crypto asset has also shown an increase of 19% in the past 30 days, as per CoinMarketCap. Although gold hasn’t reached its highest since Donald Trump won, it is approaching the $2600 price point.
Retail investors embrace Bitcoin and gold as hedge tools
JPMorgan predicts that both #Bitcoin and gold stand to benefit from a potential second term for Donald Trump. 💰📈 #Crypto
You are not bullish enough!
— Conor Kenny (@conorfkenny) November 7, 2024
JPMorgan analysts asserted that Trump’s massive victory was beneficial for the crypto industry and the stock market. According to the analysts, the pump in both sectors will likely continue under his presidency, with both assets expecting growth amid the geopolitical tension surrounding the US dollar. JPMorgan’s Panigirtzoglou stated that the analysts predicted a spike in Bitcoin and gold prices with what they termed as the ‘depreciation trading’ strategy.
The analyst’s report revealed that while gold had dipped 0.8% post-Trump’s election, Bitcoin had gained 10% in the last two days, including reaching an all-time high. The price actions suggested that markets focused more on pro-growth policies rather than the risks of increasing deficits and Trump tariffs. Notably, the analysts observed that the dollar continued to strengthen as markets perceived that tariffs would push for further ‘U.S. exceptionalism.’
According to Panigirtzoglou, the ‘devaluation strategy’ that profited from currency devaluation would benefit assets such as Bitcoin and gold. He highlighted that both were often perceived as stable stores of value amid expansionary and inflationary policies. JPM analysts expected the strategy to be strengthened by expansionary fiscal policy and geopolitical tensions, pushing gold and Bitcoin prices even higher.
“We do not see the initial negative market reaction by gold as a rejection of the “debasement trade” under a Trump win…We are bullish about Bitcoin.”
-Nikolaos Panigirtzoglou
The JPM report indicated that central banks’ activities would drive gold prices into 2025. The Wall Street firm geopolitical issues and tariffs could prompt China’s central bank to embark on accumulating gold reserves despite taking a break from buying gold in April.
Trump’s administration to provide positive environment for crypto with the Bitcoin Act
Adopting the Bitcoin Act is one of the most anticipated developments following Trump’s reelection. James Butterfill, the head of research at CoinShares, said the proposed Bitcoin Act would establish Bitcoin as a strategic reserve asset. The U.S. government would acquire 5% of Bitcoin’s total supply under the Act, thus solidifying the cryptocurrency’s legitimacy.
U.S. Senator Cynthia Lummis introduced the BITCOIN (Boosting Innovation, Technology and Competitiveness Through Optimized Investment Nationwide) Act in July. If passed, the bill called for establishing a strategic Bitcoin reserve where the U.S. government would be compelled to acquire up to 1 million Bitcoin in five years (200K per year) to help the country gradually reduce its national debt. Lummis reiterated Trump’s plan following the confirmation of his win. The president-elect had promised to set up a Bitcoin reserve upon his return to the Oval Office.
Butterfill claimed that the Act’s proper implementation would drive considerable governmental and institutional interests in Bitcoin, potentially pushing its price to heights and accelerating its growth. Broker Canaccord said the replacement of Gary Gensler and other U.S. SEC leaders, along with the passing of a comprehensive crypto-industry regulatory framework, could lead the mainstream financial services industry to a much wider adoption of digital assets.
The broker noted that while the president could not fire a U.S. SEC Commissioner, reshuffles were very much on the table.
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