JPMorgan’s Analysis Shows Institutional Investors Moving From Gold ETFs to Bitcoin

JPMorgan has highlighted evidence of institutional demand for bitcoin and investors moving from gold exchange-traded funds (ETFs) to the cryptocurrency. The firm points out that bitcoin demand is driven not only by younger retail investors but also by institutional investors, such as family offices and asset managers.

Gold ETF Investors Moving to Bitcoin

JPMorgan’s Global Markets Strategy team released a report Friday that discusses bitcoin. It also compares the flow trajectories for Grayscale Bitcoin Trust (GBTC) and gold exchange-traded funds (ETFs). The report reads:

Corporate endorsements of bitcoin and in particular the endorsement by Paypal a couple of weeks ago appear to have propagated further demand for bitcoin.

Paypal announced the launch of its cryptocurrency service, including bitcoin, on Oct. 21. The payments giant is currently rolling out the service to all U.S. users, with a plan to follow up with an international rollout and a similar product on its Venmo platform.

“In our opinion, the ascend of Grayscale Bitcoin Trust suggests that bitcoin demand is not only driven by the younger cohorts of retail investors, i.e. millennials, but also institutional investors such as family offices and asset managers,” JPMorgan’s analysts explained in the report. They added that the demand for bitcoin “is particularly evident in the Grayscale Bitcoin Trust which saw a steepening of its cumulative flow trajectory in recent weeks.”

JPMorgan's Analysis Shows Institutional Investors Moving From Gold ETFs to Bitcoin

The JPMorgan analysts proceeded to compare the October flow trajectory for Grayscale Bitcoin Trust and the equivalent flow trajectory for gold ETFs. They concluded:

This contrast lends support to the idea that some investors that previously invested in gold ETFs, such as family offices, may be looking at bitcoin as an alternative to gold.

JPMorgan explained last month that “the potential long-term upside for bitcoin is considerable if it competes more intensely with gold as an…

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