Gold ETF sees $7 billion outflow! J.P. Morgan strategist: Bitcoin is climbing up following gold

A strategist from the largest U.S. financial institution, JPMorgan Chase, recently put forward an interesting perspective, suggesting that the recent poor performance of gold is due to the rise of Bitcoin. He believes that institutional investors are just beginning to adopt Bitcoin.

Gold ETF Outflows $7 Billion

According to Bloombergreport, JPMorgan's quant strategist Nikolaos Panigirtzoglou believes that Bitcoin is climbing at the expense of gold. Since October, funds have been pouring into Bitcoin funds, and if this trend continues, more institutional investors will enter the cryptocurrency market. He noted:

Institutional investors have been investing in gold for many years, but it seems they are just realizing Bitcoin now.

JPMorgan data shows that since October, Grayscale's Bitcoin Investment Trust fund GBTC has received nearly $2 billion, while gold ETFs have seen outflows of $7 billion.

As shown in the chart below, as gold holdings decrease, Bitcoin prices rise.

High Growth Potential for Bitcoin

The strategist pointed out that Bitcoin accounts for only about 0.18% of family office assets, while gold accounts for 3.3%. If the cryptocurrency trend continues, Bitcoin will have significant room for growth.

However, he also mentioned that Bitcoin's short-term price may be overvalued, while gold shows signs of recovery, which could lead speculators to sell off Bitcoin.

In fact, gold has been declining since hitting a record high of $2,074 in August, but has rebounded by about 3.5% since hitting a low on December 1st; Bitcoin, on the other hand, hit a historic high on the same day but has since struggled, falling to $17,600 yesterday (12/9).

However, JPMorgan's strategist stated that if his argument holds true in the medium to long term, gold prices will suffer from structural declines in the coming years.

According to previous reports, in an investment fund report released by JPMorgan on November 6th, it was mentioned that the growth rate of Grayscale's GBTC shares is faster than that of gold ETFs. The reason may be that family offices view Bitcoin as an alternative to gold and claim that its market value has the potential to grow tenfold.

Wall Street heavyweights, including Bridgewater Associates founder Ray Dalio and BlackRock's Chief Investment Officer Rick Rieder, are supporters of gold, but they have recently put forward the argument that Bitcoin could become an alternative to gold. However, JPMorgan CEO Jamie Dimon remains firm in his stance, emphasizing at a summit hosted by The New York Times in November: "Bitcoin is not my cup of tea."