JPMorgan: institutions could shift capital from Bitcoin into gold

A correction in the crypto market could push institutional investors toward panic selling of Bitcoin and a move into gold. That view was presented by JPMorgan analysts, CNBC reports.

The driver will be doubts about Bitcoin’s ability to serve as a store of value. Against the backdrop of a growing correction in Bitcoin, gold prices have risen about 6% since the start of May.

The pattern of flows in Bitcoin points to a further reduction in institutional presence. In the last month, futures markets have experienced the sharpest and most sustained liquidation since October last year, they explained.

In the long term, analysts stand by their forecast that Bitcoin could reach around $146,000. For the current volatility ratio between gold and its digital counterpart, they consider $35,000 to be an appropriate estimate.

Mike McGlone, senior commodities strategist at Bloomberg Intelligence, is convinced that the positive momentum in the precious metal will pose challenges for Bitcoin, the leading cryptocurrency.

The potential for gold to rise to the 2020 highs by 20% provides a sufficient basis for a renewed uptrend. For Bitcoin, as its alternative, this could create headwinds, he wrote.

Technical Outlook — It’s a #Gold Bull-Market
Gold’s 20% discount to its 2020 record high is sufficient for a resumption of a bull market for the metal, as we see it, but store-of-value newcomer #Bitcoin is likely to remain a headwind to its upside. pic.twitter.com/lzF60Yhw7U

— Mike McGlone (@mikemcglone11) May 18, 2021

Earlier, JPMorgan Chase chief Jamie Dimon confirmed that the bank’s clients are interested in the first cryptocurrency.

In April 2021, it emerged that JPMorgan bitcoin fund was planned to launch.

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