JP Morgan Analysts See A Strong Future For Gold And Bitcoin Under Trump

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With Donald Trump now elected as the next U.S. president, market sentiments have turned positive as experts foresee Bitcoin crossing major benchmarks by 2025. Moreover, JPMorgan analysts envision a strong outlook for both gold and bitcoin. The bank’s team, led by managing director Nikolaos Panigirtzoglou, has highlighted the term “debasement trade,” 

This is an investment strategy that thrives on currency devaluation caused by inflationary policies and expansionary fiscal measures.

This strategy benefits from the devaluation or weakening of a currency, generally due to inflationary or expansionary fiscal policies. In this trade, investors buy assets like gold and bitcoin, which are considered stores of value that can preserve their worth even while a currency’s purchasing power diminishes.

In a report on Wednesday, the JP Morgan analysts noted that the debasement trade “is likely to be reinforced by both tariffs and geopolitical tensions as well as an expansionary fiscal policy (‘debt debasement’),”  “We do not see the initial negative market reaction by gold as a rejection of the ‘debasement trade’ under a Trump win. After all, bitcoin, the other component of the ‘debasement trade’ rallied after the Trump win.”

After Trump’s win was confirmed on the day of election results, Bitcoin surged to record a new all-time high of  $76,244. It is currently trading at $74,847. Notably, the analysts are positive on Bitcoin in 2025. 

Gold and bitcoin prices are expected to rise

The analysts also noted that the pace in which the central bank will purchase gold will be crucial in determining gold’s price trajectory through 2025. 

They noted that the Central banks heavily increased gold holdings in 2022 after the Ukraine war flared and sanctions on Russia were imposed. While the People’s Bank of China, the country’s central bank, paused its gold purchases last April, the ongoing tariffs and geopolitical tensions are expected to drive further diversification by central banks, including the PBoC, away from dollar reserves and into gold, the analysts noted.

With increased investments in gold and bitcoin ETFs since last summer, retail investors have also been backing both gold and bitcoin, The analysts believe that this trend will continue into 2025, and Trump’s policies will probably support both assets.

Microstrategy’s 21/21 Plan To Boost BTC

Additionally, what will further boost the Bitcoin price is Microstrategy’s bold Bitcoin acquisition plan. The plan involves raising $42 billion in capital over the next three years, with $21 billion coming from equity and the other $21 billion from fixed-income securities. Analysts also noted that for 2025 alone MicroStrategy would be investing $10 billion into bitcoin which is approximately equal to its cumulative purchases so far since mid-2020. 

Trump’s win has initiated a big rally in the stocks, and cryptocurrencies, and also a rise in the value of the Dollar as well. Going ahead, as Trump had promised in his campaigns, the crypto industry awaits ease in the regulation so that the US could serve as the hub for digital assets and innovation.