JPMorgan: Bitcoin’s popularity is growing in the current macroeconomic environment

Analysts believe bitcoin will follow gold, which has surged in value over the past quarter

04.10.2024 - 14:35

1 min

What’s new? Analysts at JPMorgan suggest that rising geopolitical tensions and the approaching US presidential election are pushing investors to use gold and bitcoin as safe haven assets to hedge risks.

Material by The Block

What else is known? Experts note that gold initially reacted more restrainedly to recent geopolitical events, but over the last quarter, its price has risen sharply, approaching the level of $2700 per ounce. According to JPMorgan, this growth was influenced by a 4-5% decline in the dollar and a significant 50-80 basis points decline in real US Treasury bond yields.

Overall, the rise in interest in bitcoin and gold has been driven by a combination of factors, including heightened geopolitical uncertainty from 2022, ongoing inflation concerns, large government deficits in major economies, and declining confidence in fiat currencies, particularly in some emerging markets.

CryptoQuant also previously wrote that historically, declining US Treasury bond yields have driven gold prices higher.

For example, in 2008, when Treasury bill yields fell for 13 weeks, gold prices soared from $590 to a peak of $1900 per ounce by 2011. Now we are seeing a similar trend, with the price of gold rising from $2000 to nearly $2700. Bitcoin, often referred to as digital gold, could replicate this rise.

However, CryptoQuant analyst J.A. Maartuun noted that gold is already benefiting from falling government bond yields and rising M2 money supply, but bitcoin yields are not rising. For now, there is still an inverse correlation between the assets.

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