Bitcoin’s lead over Gold is adversely impacting the gold market while Bitcoin continues to surge, says JPMorgan.
JPMorgan Chase & Co suggested recently that the continuous increase in Bitcoin’s price is jeopardizing Gold’s market. The group of JPMorgan’s strategists under Nikolaos Panigirtzoglou’s supervision said that the inflow of trade funds had taken away from Gold. They pointed out that the said inflow of funds had been diverted into Bitcoin. This significantly decreased the market value of Gold since October from when Bitcoin is on the Bull-Run, they suggested.
JPMorgan suggested that only a small portion of this year’s billions of dollars investment was brought into the Gold trading. While the major chunk of this investment was absorbed by Bitcoin due to its mass-adoption by institutions.
In an interview, Panigirtzoglou told Bloomberg that the institutional support and investment for Bitcoin is rather new. If Bitcoin’s mass-adoption continued to grow in this pace, then Gold would soon lose its centuries’ old dominance in trading.
To further explain their viewpoint, JPMorgan also took into comparison Grayscale Bitcoin Trust’s growth this year. It was pointed out by JPMorgan that Grayscale’s Bitcoin Trust was a highly valued trust fund. However, in 2020 alone it had received Bitcoin for an approximate amount of US$ 2 Billion and that too since October only. On the other hand, the investment brought into Gold for a similar period was about half of Bitcoin.
Tycoons from Wall Street were once fond of discrediting the legendary coin for various reasons. However, very recently they too had been seen taking U-turns about their viewpoints regarding Bitcoin. In fact, many had already withdrawn their earliest thoughts on Bitcoin and said that it is a commendable source of storing money. Some had even bought a few coins to counter anticipated inflation amid the Covid-19 outbreak.
Similarly, world-renowned businessmen/business too had invested in Bitcoin or are planning to join the investment frenzy. Stan Druckenmiller and Paul Tudor Jones as well as Blackrock were amongst those who invested initially into Bitcoin this year.
In these circumstances, would Gold be able to maintain its dominance, or whether Bitcoin would remain on the top seat? Some suggested that the time for Gold is over and an era of the digital world, particularly Bitcoin, has begun.