JPMorgan Says Institutional Investors Are Replacing Gold With Bitcoin

The shift into bitcoin that drove late-2020 all-time highs “has started reemerging in recent weeks,” wrote analyst Nikolaos Panigirtzoglou.

“Bitcoin’s allure as an inflation hedge” is drawing institutional investors back to the crypto market, JPMorgan’s Nikolaos Panigirtzoglou wrote in an Oct. 6 research note to clients.

  • “There are tentative signs that the previous shift away from gold into bitcoin seen during most of Q4 2020 and the beginning of 2021 has started reemerging in recent weeks,” he said.
  • Bitcoin prices have surged above $50,000 recently, climbing 85% this year. The price of ether, the native currency of the Ethereum blockchain, has rose 393% year to date.
  • Meanwhile, gold prices are hovering below $1,800 per ounce, falling 6.5% in 2021.
  • Panigirtzoglou pointed to “the failure of gold to respond in recent weeks to heightened concerns over inflation” as a possible driver of the return to bitcoin.
  • Gold is often seen by investors as a hedge against inflation due to the perception it protects purchasing power and the ability to provide defense during market turmoils.

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