JPMorgan: Trump Win Could Fuel Retail Surge in Bitcoin and Gold Through 'Debasement Trade

As the U.S. election nears, JPMorgan analysts are predicting that a potential victory for Donald Trump could act as a fresh catalyst for bitcoin, highlighting what they term the “debasement trade” among retail investors.

"Retail investors appear to be doubling down on the 'debasement trade,' increasingly turning to assets like bitcoin and gold ETFs," remarked JPMorgan’s managing director Nikolaos Panigirtzoglou in a recent report. The trend extends beyond bitcoin, as meme and AI tokens have also surged in market cap, outpacing other assets.

Over the past two days, spot bitcoin ETFs recorded an impressive $1.3 billion in net inflows, pushing October’s total to $4.4 billion. This rush of capital marks the third-largest month of bitcoin ETF inflows since their debut, as retail investors seek hedges against currency instability.

In contrast, institutional activity has waned, with a marked reduction in bitcoin futures trades as reflected by CME bitcoin futures contract data. “Bitcoin futures have become rather overbought, suggesting possible downside risks,” analysts noted. Gold ETFs, similarly, have maintained inflows, predominantly from retail, while institutional demand in gold futures has also paused.

The analysts concluded that, if a Trump win motivates retail investors to pursue risk assets and expand their “debasement trade” strategy, it could present further growth opportunities for bitcoin and gold prices.

Earlier in October, JPMorgan indicated a bullish outlook for the crypto sector in 2025, citing the debasement trade's rising influence and the potential for Trump’s return as possible growth drivers.