After JPMorgan, Deutsche Bank Survey Finds Investors Choosing Bitcoin Over Gold
While Bitcoin has always been the favorite among retail crypto investors, now even banking institutions have started speaking in favor of it. Analysts at the German banking giant Deutsche Bank stated that investors are now choosing Bitcoin over Gold as a potential inflation hedge.
In its latest survey, the banking giant found that Bitcoin’s popularity has now gone above Gold as a store of value asset. Jim Reid, managing director, head of global fundamental credit strategy at Deutsche Bank said: “There seems to be an increasing demand to use bitcoin where gold used to be used to hedge dollar risk, inflation, and other things”.
Bitcoin has been one of the top performers this year surging nearly 150% year-to-date. On the other hand, Gold has appreciated only by 22%. Apart from Gold, Bitcoin has outperformed all other traditional assets in the market.
The world’s largest cryptocurrency is currently trading around $18,000 with a market cap of $330 billion. This month alone, BTC price has jumped more than 25% and over 60% since the start of October 2020.
But Deutsche bank is not alone suggesting an increasing demand for BTC. Earlier this month, Wall Street giant JPMorgan also noted that Bitcoin remains the favorite pick among new-age investors.
JPMorgan cited the growth of the Grayscale Bitcoin Trust (GBTC) that offers institutional services and over $9 billion assets under management. Since the beginning of 2020, the AUM of GBTC has surged by nearly 170%. As of now, the GBTC investment vehicle holds more than 500,000 BTC tokens I.e. nearly 2% of the total Bitcoin supply.
The JPMorgan analysts wrote: “This contract lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at Bitcoin (BTC) as an alternative to gold”.
JPMorgan further added that 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. These institutional investors appear to be the biggest investors in the Grayscale Bitcoin Trust, perhaps reflecting their preference to invest in Bitcoin in fund format.”
Although JPMorgan analysts have been giving favorable statements for Bitcoin, the old-critic and bank chief Jamie Dimon isn’t yet convinced. Recently speaking at a New York Times event, Dimon said: “I’m a believer in cryptocurrency [that is] properly regulated and properly backed. Bitcoin is kind of different and that’s not my cup of tea. […] I’m not really interested in bitcoin.”