JPMorgan views on whether investors are now shifting from gold to bitcoin

Due to the year-to-date withdrawals from exchange-traded funds (ETFs) that track gold and the notable inflows into Bitcoin ETFs, there are concerns over the possibility that investors are switching from bullion to the biggest cryptocurrency in the world.

This year, BTC funds have had an influx of $10.6 billion, driven by increased demand in spot Bitcoin ETFs, whereas physical gold ETFs have seen withdrawals of $7.6 billion.

JPMorgan strategists, however, don't think that investors are moving their money from gold to Bitcoin in this way.

"Instead of switching from the former to the latter, we disagree and think that private investors and individuals have propagated both gold and bitcoin YTD," analysts stated in a note.

Merely examining ETF movements might provide a false impression, possibly undervaluing the amount of gold that private investors and people purchase in the form of bars and coins while overvaluing their investment in Bitcoin.

Retail investors are moving away from storing Bitcoins in digital wallets and "to the convenience and regulatory protection of the new spot bitcoin ETFs," according to JPMorgan analysts.

Analysts stated, "It appears that speculative institutional investors, like hedge funds and momentum traders like CTAs, have contributed to the rally in addition to retail investors by purchasing bitcoin and gold futures since February, possibly even more so than retail investors."

(Sources: investing.com, reuters.com)