Summary
- JPMorgan said money is moving from gold to Bitcoin as US debt expands and concerns mount over a weaker dollar.
- JPMorgan said that since the Iran conflict in March, gold ETFs have seen outflows while spot Bitcoin ETFs have posted inflows for three straight months.
- Ray Dalio said the US fiscal deficit will erode the value of fiat currencies, lifting tangible assets such as gold.
Forecast Trend Report by Period
As US government debt has climbed past $39 trillion, stoking warnings of a fiscal crisis, investors seeking protection against a weakening dollar are shifting from gold to Bitcoin, according to JPMorgan.
The Block reported on May 9 that a JPMorgan research team said in a recent report that the "debasement trade" — choosing Bitcoin over gold as a hedge against currency debasement — is becoming increasingly pronounced.
JPMorgan pointed to fund flows as evidence. Since the Iran conflict in March, gold exchange-traded funds have seen outflows, while spot Bitcoin ETFs have attracted inflows for three straight months.
US national debt recently surpassed $39 trillion for the first time. The Treasury Department said total federal debt stood at $39.0167 trillion as of May 17.
The milestone has intensified concern in global markets over the dollar-based system. Forbes reported that Bridgewater Associates founder Ray Dalio said on a recent podcast that the US is spending 40% more than it earns and that its debt amounts to six times its income.
Historically, fiscal deficits of that scale have led to declines in the value of fiat currencies, Dalio said.
He added that all fiat currencies will lose their role as stores of value and that tangible assets such as gold tend to rise during such periods.
Uk Jin
wook9629@bloomingbit.ioH3LLO, World! I am Uk Jin.
