Is it true that investors are abandoning gold for Bitcoin?

Contrary to some analysts' expectations, a research report released Thursday by JPMorgan found that institutional and retail investors have not reduced... Their investments in gold In favor of Bitcoin (BTC) this year, they even invested in both in parallel.

The report indicates that the investment exit from gold ETFs adds to the rise of investment funds trading on Bitcoin futures contracts (Bitcoin ETF futures). This has sparked speculation about investors moving from the precious metal to the digital currency. However, the bank finds quite the opposite.
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The report, prepared by a team of analysts led by Nicholas Pangerotoglou, states: "Individual investors and private institutions have purchased both gold and Bitcoin since the start of this year. They have not moved from first to second."

The report adds: “Alongside individual investors, institutional speculators such as hedge funds, including momentum traders such as registered trading advisors (CTAs), also appear to have contributed to the rally by purchasing gold and bitcoin futures. “ “Since February, perhaps more than individual investors.”

The bank's analysis showed "a significant accumulation of positions since February, worth $7 billion in Bitcoin futures and $30 billion in gold futures."

The bank warned of high risks.Reversing the mean trend"(mean reversion). This means that both assets can return to their previous average levels.

The report also states that MicroStrategy also played a role in amplifying the rise. Or I bought over a billion dollars of Bitcoin this year, in addition to the more than a billion dollars it received in the last quarter of 2023.

“We believe that MicroStrategy's debt-funded Bitcoin purchases add leverage and speculation to the current uptrend in cryptocurrencies,” the report read, “increasing the risk of further deleveraging.” severe in the event of potential future decline.

Investors Ditch Bitcoin Mining Stocks as Spot ETFs Emerge

A report from Luxor Technologies shows that traditional investors are starting to move away from Bitcoin mining stocks with the rise of spot ETFs.

Previously, investors relied on stocks Mining companies As a way to access Bitcoin without owning it directly. But with the SEC's approval of cash ETFs, this dynamic has changed dramatically.

Alessandro Cecere, marketing expert at Luxor Technologies, said the market has already started to assess the impact of the fourth halving. Which will take place in mid-April. He added that investors no longer need to rely on shares of mining companies to access Bitcoin.

A previous report from CryptoQuant noted increased currency sales activity by mining companies since 2012. This indicates increasing selling pressure on Bitcoin.

Halving and selling currencies

However, Ki Young Joo, CEO of CryptoQuant, expects the current bull market to continue unless ETF inflows slow down.

He also pointed out that American mining companies are not the main sellers of Bitcoin. Which suggests that foreign or incumbent mining companies could be the biggest sellers.

Cisiri explained that publicly traded mining companies have the advantage of issuing new shares to raise capital. This is not available to private sector mining companies. He added that this distinction could explain why American mining companies have not yet started selling their cryptocurrency holdings.

Cesere noted that higher interest rates compared to the past bull market made issuing new debt less attractive. This may explain why offshore miners are selling Bitcoin in anticipation of a significant drop in revenue after the halving.