JPMorgan assesses intrinsic value in Bitcoin and gold as key assets
In the rapidly evolving world of finance, 2024 and 2025 have seen a significant shift in the approach to inflationary trading, with Bitcoin and gold emerging as key players in investor portfolios.
According to JPMorgan analysts, the prediction of good results for both digital currencies and gold during Donald Trump's presidency signals a long-term trend of investing in these assets. The past year has been labelled as a turning point for the digital assets industry by JPMorgan, with Bitcoin increasingly viewed as a digital store of value.
The fixed supply limit of 21 million coins gives Bitcoin an attractive appeal amid inflationary concerns and the potential devaluation of fiat currencies. As a result, JPMorgan now allows certain clients to hold Bitcoin in their portfolios and is expanding services like crypto-backed loans using Bitcoin as collateral.
Gold, while still a key inflation hedge, has experienced a price plateau and some downward forecast revisions by JPMorgan and other major banks for late 2025. Analysts cite factors such as reduced central bank demand, relative dollar strength, and easing geopolitical tensions as reasons for a likely moderation or "healthy correction" in gold prices.
Notably, the non-bank investor market now includes a significant portion of investors using gold derivatives, indicating a diversified approach to investment. The volume of gold held by central banks and private investors worldwide indicates a significant increase in gold's share in portfolios, with physical gold, gold ETFs, and other derivative instruments now making up a substantial part of the non-bank investor market.
In 2024, a record inflow of funds into the crypto market was observed, indicating that Bitcoin has become a structurally important tool for market participants. A notable example is MicroStrategy's $22 billion investment in Bitcoin purchases.
JPMorgan's estimates show that the total capital inflow into the digital assets sector over 12 months was approximately $78 billion, with $14 billion invested in crypto venture funds and $27 billion into ETFs.
The growing institutional acceptance of Bitcoin as a hedge against inflation, somewhat analogous to gold's traditional role, underscores the importance of digital assets in inflationary trading strategies. This institutional pivot, led by JPMorgan CEO Jamie Dimon's softened stance on Bitcoin, signifies the growing importance of digital assets in the inflation hedge landscape.
In conclusion, JPMorgan's analysts report an inflationary trading trend in 2024 characterized by increasing institutional integration of Bitcoin as a digital inflation hedge, while gold continues to serve as a traditional inflation hedge but with expectations of price stabilization or slight declines in the near term. This marks a significant evolution in the inflation hedge landscape, blending digital and traditional assets.
Technology plays a crucial role in enabling the growth of Bitcoin and gold investments, as advanced platforms facilitate crypto-backed loans and the trading of digital currencies and gold derivatives. The influx of institutional funding into Bitcoin, such as MicroStrategy's investment, is a testament to the increasing importance of technology in transforming digital currencies into viable investment options, mirroring traditional approaches to investing in gold.
