JP Morgan: As gold and Bitcoin continue to gain structural importance, the 'devaluation trade' is here to stay

PANews reported on January 5 that according to Theblock, JPMorgan analysts said that Bitcoin and gold are structurally becoming key components of investors’ portfolios. "Gold prices have risen over the past year well beyond what was suggested by changes in the U.S. dollar and real bond yields, likely reflecting a resumption of this 'devaluation trade,'" JPMorgan analyst Nikolaos Panigirtzoglou wrote in a note. ” At the same time, record capital inflows into crypto markets in 2024 indicate that Bitcoin is also becoming a “more important component” of investors’ portfolios, they added.

Devaluation trading refers to a strategy in which investors turn to assets such as gold and Bitcoin to hedge against the depreciation of fiat currencies, which is often driven by factors such as inflation, rising government debt and geopolitical instability.

Analysts said that judging from the amount of gold investments held by central banks and private investors, the structural growth of gold in investor portfolios is obvious. This includes physical gold, gold ETFs and other investment vehicles, which now account for a significant portion of total assets held by non-bank investors globally.

Overall, analysts believe that the devaluation trade will continue as gold and Bitcoin continue to gain structural importance. Last October, analysts were optimistic about the development of cryptocurrencies in 2025, citing factors including devaluation trading and increasing institutional adoption.