The investment bank says gold could languish for years as Bitcoin’s popularity grows.
According to analysts at JPMorgan Chase, growing mainstream acceptance of Bitcoin (BTC) as a reserve currency is having a significant effect on gold, setting the stage for a big change in global distribution between the two commodities.
Quantitative strategists, like Nikolaos Panigirtzoglou, assume that the digital gold story of Bitcoin would drag buyers away from precious metals, perhaps for years to come, resulting in a significant price divergence between the two commodities.
Bitcoin accounts for just 0.18% of assets invested in family offices, compared to 3.3% for gold exchange-traded funds, the bank added. Using this data as a starting point, just a slight reallocation from gold to BTC for the price of bullion could lead to structural headwinds.