Bitcoin is coming for gold, says one JP Morgan analyst, while another Morgan Stanley analyst says it is coming for the dollar.
“The adoption of bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced,” said JPMorgan Chase & Co.
They calculate only 0.18% of family office assets are in bitcoin while it stands at 3.3% for gold.
They suggest some of that gold might go to bitcoin, with the strategists suggesting bitcoin’s rise is coming at the expense of gold.
However the Chief Global Strategist at Morgan Stanley, Ruchir Sharma, says bitcoin’s rise is more due to the dollar.
“Money printing is likely to continue, even when the pandemic passes,” Sharma says in an editorial for FT. “Trusted or not, bitcoin will gain from widening distrust in the traditional alternatives.”
“Do not assume that your traditional currencies are the only stores of value, or mediums of exchange, that people will ever trust. Tech-savvy people are not likely to stop looking for alternatives, until they find or invent one. And stepping in to regulate the digital currency boom, as some governments are already considering, may only accelerate this populist revolt,” he says.
Another reason for bitcoin’s rise is simply that studies have now concluded this is a brand new uncorrelated asset that would be good for your investment portfolio.
The halvening in May of this year has also contributed due to the reduced supply, with Satoshi Nakamoto so continuing to teach the world nearly 12 years on.
“Over the past 12 years, they have risen from literally nothing to $560 billion in market capitalization. Fads don’t typically last 12 years. There are good reasons for this — reasons that every investor should hear,” Wells Fargo says.
They don’t list the reasons, promising to do so in the coming year, but new global money used in international trade by states like Venezuela, Iran and even Turkey, is perhaps one very good explanation for why this tool useful to many is not a fad.
Something that big money now seems to have realized as billions move into stock traded crypto funds.