There could be additional upside to bitcoin and gold if former President Trump emerges victorious in next week’s election, according to JPMorgan. Retail investors have been leaning in to the ” debasement trade,” buying bitcoin and gold exchange traded funds (ETFs) in the run-up to the Nov. 5 U.S. presidential election, JPMorgan analyst Nikolaos Panigirtzoglou said in a note Wednesday. “Overall, to the extent a Trump win inspires retail investors to not only buy risk assets but to also further embrace the ‘debasement trade,’ there could be additional upside for bitcoin and gold prices in a Trump win scenario,” the analyst wrote. The race between Trump, the Republican nominee, and Vice President Kamala Harris, the Democratic nominee, has been neck and neck. Many investors are concerned about the state of the government deficit, which rose 8% in the 2024 fiscal year to $1.8 trillion , and increased tax cuts promised by both candidates. Bitcoin and gold are seen by many investors as hedges against the potential for fiscal and monetary policy that combine to reduce the value of the dollar and lift inflation. Spot bitcoin ETFs saw $1.3 billion of new investor money in the first two days of this week, Panigirtzoglou noted. That brought inflows for all of October to $4.4 billion, making it the third largest month for net inflows since the January launch of the bitcoin funds. Meme and AI-related tokens are also outperforming the overall crypto market in another measure of retail investors’ aniumal spirits. Meanwhile, activity from institutional investors appears to have been on pause for the past two weeks, Panigirtzoglou said, based on cumulative open interest changes in CME bitcoin futures. Bitcoin futures have become “rather overbought” and could face vulnerability “going forward.” The picture is similar for gold, where retail investors continue to buy gold ETFs while activity in gold futures shows a pause. —CNBC’s Michael Bloom contributed reporting.
