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JPMorgan analysts suggest bitcoin and gold could see retail demand surge with a potential Trump win, though institutional investors remain cautious amid overbought futures.

JPMorgan analysts, led by managing director Nikolaos Panigirtzoglou, indicated in a Wednesday report that a possible Donald Trump win in the upcoming U.S. presidential election could enhance retail interest in bitcoin and gold. They noted:

Retail investors appear to be embracing the ‘debasement trade’ in an even stronger manner by buying bitcoin and gold ETFs.

They observed significant retail activity, not only in bitcoin and gold exchange-traded funds (ETFs) but also in “meme and AI tokens the market cap of which has outperformed.”

The analysts highlighted a notable increase in bitcoin ETF inflows, with retail investors adding $1.3 billion in just two days, pushing October’s total to $4.4 billion — marking the third-highest monthly inflow since January. Despite this uptick, institutional investors remain more cautious. “Bitcoin BTC +0.39% futures have become rather overbought creating some vulnerability going forward,” the analysts warned, pointing to a slowdown in institutional demand in bitcoin futures. Similarly, while retail investors are actively buying gold ETFs, institutional interest in gold futures has shown a noticeable pause.

JPMorgan analysts reflect an optimism that macroeconomic uncertainties, inflation concerns, and the prospect of increased retail trading could support cryptocurrency growth through 2024. They concluded:

Overall, to the extent a Trump win inspires retail investors to not only buy risk assets but to also further embrace the ‘debasement trade’, there could be additional upside for bitcoin and gold prices in a Trump win scenario.

Meanwhile, JPMorgan CEO Jamie Dimon remains skeptical about bitcoin, despite the bank’s broader interest in blockchain and digital assets. In a recent interview, he argued that bitcoin “doesn’t have value.” Dimon has also linked bitcoin to illicit activities and voiced support for stricter regulation if he were in a government role. While JPMorgan backs blockchain initiatives and crypto products like ETFs, Dimon himself remains critical of bitcoin as an investment.