Following the presidential victory of Donald Trumpthe analysts of JPMorgan (NYSE:JPM) expects Bitcoin (CRYPTO:BTC) and gold are seeing significant gains, attributing the expected growth to a “depreciation trade.”
What happened: This investment approach aims to take advantage of currency devaluation, often due to inflationary or expansionary fiscal policies, has reported The Block.
In such scenarios, assets like Bitcoin and gold are considered reliable safe havens, which help protect wealth against declining purchasing power.
The “depreciation trade“, according to the JPMorgan report led by the CEO Nikolaos Panigirtzoglouwill likely be reinforced by possible fiscal expansion, tariffs and geopolitical policies of the Trump administration.
“We expect an increase in depreciation trading due to debt expansion and increased geopolitical tension,” explained Panigirtzoglou, noting that although gold saw an initial decline, Bitcoin rose after the Trump’s victory, underscoring investor confidence in trade.
While analysts refrained from setting a specific price target for Bitcoin by 2025, Panigirtzoglou expressed a “positive view on Bitcoin by 2025.”
The trajectory of central banks’ gold purchases will play a vital role in determining the future price of gold, JPMorgan analysts noted.
They reported an increase in central bank gold reserves following the conflict in Ukraine and resulting sanctions against Russia in 2022.
Also read: Bitcoin ETFs See $622 Million Inflows Following Trump Victory
While the People’s Bank of China halted its gold acquisitions last April, JPMorgan predicts that ongoing global tensions and tariff policies could encourage central banks to further diversify from dollar reserves into gold.
Retail investors have also shown increasing interest in Bitcoin et l’orwith ETF investments in both assets rising since mid-2023, a trend JPMorgan expects to continue through 2025.
Analysts say Trump’s policies could further strengthen these assets, making them attractive investments in uncertain economic conditions.
JPMorgan’s report also suggests that Bitcoin’s growth could benefit from additional support from Bitcoin’s ambitious “21/21 plan.” MicroStrategy (NASDAQ:MSTR).
This plan involves raising 42 billion dollars in three yearshalf through stocks and half through fixed income, with $10 billion specifically allocated to investments in Bitcoin for 2025 alone.
This projected investment matches the company’s total Bitcoin purchases since mid-2020, indicating a substantial commitment to Bitcoin as a long-term asset.
Next steps: These developments, coupled with a favorable regulatory landscape under President Donald Trump, will be discussed at the event Future of Digital Assets by Benzinga on November 19, in the presence of industry leaders such as Raoul Pal.
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