Main navigation

Institutions May Be Dropping Bitcoin for Gold As BTC Slips Below $40,000: JP Morgan

News
Wed, 05/19/2021 - 11:46
article image
Yuri Molchan
Analysts of top bank JP Morgan believe that institutions might be pivoting back to gold from Bitcoin but Bloomberg’s top expert reckons BTC will keep barring XAU’s rise
Institutions May Be Dropping Bitcoin for Gold As BTC Slips Below $40,000: JP Morgan
Cover image via stock.adobe.com
Read U.TODAY on
Google News
Contents

Reuters has reported that analysts at the banking conglomerate JP Morgan believe that institutional investors may now be turning from Bitcoin back to gold as the flagship cryptocurrency is in a sea of red and tanked below $40,000 earlier today.

7715_0
Image via Twitter

Back to gold from Bitcoin, they say at JP Morgan

Now that Bitcoin has plummeted below the crucial $40,000 level earlier today, and Ethereum along with the rest of the crypto market followed suit, JP Morgan analysts believe that institutions are now panic-selling their Bitcoin holdings to grab gold—the habitual store of value.

JP Morgan experts have referred to data compiled based on open interest in Bitcoin futures on CME.

They have called the current crypto massacre the biggest liquidation since October 2020.

Now, as gold has shown a six percent rise since the start of May, investors seem to be pivoting to XAU, turning their back on Bitcoin and no longer seeing an inflation hedge in it.

The overall decline of cryptocurrencies (not just Bitcoin) has pushed the total market capitalization from the record $2.5 trillion down to $1.82 trillion after a drop of almost 15 percent in the past day.

Related
Mike Novogratz on Bitcoin: “I Think $40K Should Hold”

"Bitcoin likely to remain headwind to gold's upside"

On May 18, the chief commodity strategist at Bloomberg, Mike McGlone, shared his take on Bitcoin and gold, which is different from that of the JP Morgan analysts.

He believes that the current 20 percent drop from the August 2020 peak of gold will allow the precious metal to start a bull run again.

However, McGlone pointed out that the "store-of-value newcomer Bitcoin" will continue to snag gold's further rise.

7715_1
Image via Twitter
article image
About the author

Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets. 

His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.

Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.