JPMorgan Predicts $4.4B Bitcoin Inflows as Retail Demand Surges Ahead of U.S. Election

Retail interest in bitcoin and gold ETFs is red hot. In the last two days alone, retail investors added $1.3 billion to bitcoin ETFs, taking October’s total to $4.4 billion.

That’s the third highest monthly inflow since January. But institutional investors are still cautious, especially as bitcoin futures are overbought and could be vulnerable if the demand momentum fades.

https://twitter.com/imcryptokarency/status/1852241221596463212

• Bitcoin ETF Inflows: $1.3 billion in two days, $4.4 billion in October

• Third-Highest Monthly Inflow: Since January

• Analyst Note: Rising retail interest, cautious institutional outlook

Institutions Are Cautious As Overbought Conditions Linger

While retail investors are piling into bitcoin and gold, institutional investors are holding back. JPMorgan analysts say bitcoin futures are overbought and that could lead to short term volatility.

Unlike retail investors who are flocking to bitcoin ETFs, institutions are being more cautious, especially in futures. They note that while retail demand is rising, institutions are hesitant to get into an asset that has gone up so fast with no corresponding economic activity.

And gold futures have seen no institutional interest, while retail investors are adding to their gold ETF holdings. This is a broader trend: retail traders see bitcoin and gold as hedges against inflation and economic uncertainty, institutions see overvaluation risks.

• Bitcoin Futures: Overbought

• Gold Futures: No institutional interest

• Divergence: Retail vs institutional

Mac and election will drive upside for bitcoin and gold

The report says broader macro factors – inflation, economic uncertainty and policy changes after the election – could drive more retail demand for bitcoin and gold into 2024.

In what they call a “Trump-driven upside scenario” they say a Trump win would reinforce retail confidence in alternative assets and add fuel to the “debasement trade” as investors look for protection from currency devaluation and inflation risks.

https://twitter.com/cryptospace2day/status/1852204516520694226

But JPMorgan CEO Jamie Dimon is still bearish on bitcoin, even as the bank has backed various blockchain initiatives and cryptocurrency products like ETFs. Dimon has consistently said bitcoin has no intrinsic value and has raised concerns about its use in illegal activities. He’s at odds with the bank’s growing interest in digital assets, which is a divide within JPMorgan’s crypto approach.

• Mac and inflation: Support for demand

• JPMorgan: Supporting blockchain, bearish on bitcoin

• CEO Jamie Dimon: Still doesn’t like bitcoin

Retail investors are pouring into bitcoin and gold, will institutions follow or will they be right to be cautious?