JPM said consumers and institutional investors bought gold and bitcoin this year. The bank found gold and bitcoin futures rising since February. Bitcoin's surge was boosted by MicroStrategy's bitcoin accumulation.
In a study report released on Thursday, JPMorgan (JPM) reported that institutional investors and individuals have been purchasing both gold and bitcoin {{BTC}} this year, contrary to some analysts' predictions.
The survey noted gold ETF outflows and bitcoin ETF inflows, suggesting investors were switching from gold to cryptocurrencies. The bank claimed otherwise.
Nikolaos Panigirtzoglou and colleagues noted that private investors and individuals have proliferated both gold and bitcoin year-to-date rather than switching.
By buying gold and bitcoin futures since February, speculative institutional investors like hedge funds and momentum traders like CTAs may have propagated the surge more than individual investors, the authors noted.
The bank found a “sharp position build-up since February of $7b in bitcoin futures and $30b in gold futures.” The bank stated mean reversion is likely, so both assets could fall to their typical levels.
Bank claimed software developer MicroStrategy (MSTR), which buys bitcoin corporately, boosted the rally. According to the article, the corporation bought over $1 billion of bitcoin this year and in the fourth quarter of 2023.
The research stated that MicroStrategy's debt-funded bitcoin acquisitions add leverage and froth to the present crypto surge and heighten the danger of more severe deleveraging in a future downturn.
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