JP Morgan: "Institutions Sold Bitcoin and Bought Gold"

Photo by Business Insider

[Asia Economy Reporter Yujin Cho] An analysis has emerged that institutional investors have been increasing their investments in gold instead of cryptocurrencies a month before Bitcoin's sharp decline.

On the 19th (local time), JP Morgan stated in an investor memo that institutional investors began withdrawing money from Bitcoin futures and funds and moving it into gold. Inflows into Bitcoin funds turned negative for the first time at the end of last month, right after Bitcoin's price hit a record high of $64,000.

JP Morgan said, "Bitcoin fund flows continue to deteriorate, and institutions are steadily reducing their positions," adding, "In particular, the Bitcoin futures market last month recorded the largest drop since the uptrend began in October of last year."

They also noted, "It is surprising that funds withdrawn from Bitcoin funds are flowing into traditional asset-related gold exchange-traded funds (ETFs)," and predicted, "A similar pattern may be observed in Bitcoin futures investments."

The recent sharp decline in the cryptocurrency market, including Bitcoin, has been influenced by Tesla CEO Elon Musk's controversy over Bitcoin disposals, the rise of inflation hedging measures, and strengthened related regulations.

According to Bloomberg News, Bitcoin's price fell 10% to $38,973 on the day, dropping below the $40,000 mark for the first time since February.

JP Morgan stated, "Institutions seem to feel that Bitcoin's recent six-month rally has ended," and predicted that institutions will seek stability in traditional gold, moving away from the sharp decline of Bitcoin, known as the 'Millennial gold.'

This analysis contrasts with the forecast that the millennial generation prefers Bitcoin, called 'digital gold,' over traditional gold, and that Bitcoin will emerge as an alternative currency competing with gold.

Earlier, JP Morgan predicted that if Bitcoin's market capitalization grows to the same level as gold?combining physical gold, ETFs, gold bars, and coins?Bitcoin's price could reach as high as $146,000.

However, they forecast that Bitcoin's long-term price target will depend on how well institutions adapt to Bitcoin's price volatility and increase its inclusion in their portfolios.

This content was produced with the assistance of AI translation services.