JP Morgan Chase & Co. says that due to the increase in adoption of cryptocurrency by users, gold prices can be impacted negatively in due time.
A news article on Goodreturns claims that the gold prices can take a slow down due to the blockchain industry. It is based on research conducted by JP Morgan Chase because of the immense use of cryptocurrency as assets; users may not lean towards gold.
There is no denying that the popularity of the Bitcoin market is soaring in many countries this year. Perhaps, the pandemic may have caused a flutter among investors looking for other realistic investments.
It can badly hit gold rates all over the world. JP Morgan Chase quantitative strategists analyzed that large amounts of cash were put into the Bitcoin market this year. That trend is growing during the past few months.
The metal market could take a beat down if investors are keeping moving their assets. JP Morgan strategists summed up the situation saying that the continuous adoption of the cryptocurrency by investors when compared to precious metal, is only the beginning.
The Bitcoin market mood is positive at the moment and looking good. News e! Digital is a firm that provides readers with crypto news had this to tweet about the gold prices getting affected negatively because of Bitcoin, according to JP Morgan Chase.
According to the Grayscale Bitcoin Trust, which is listed security among institutions, have noticed the intense flow of money in the value of excess of $2 billion since October. This is in comparison to the outflow of around $7 billion from gold ETFs (exchange-traded funds).
JP Morgan Chase has calculated that as of now, Bitcoin is only 0.18% of family office assets. However, gold ETFs are more than 3.3% at the moment. It only means there is going to be an immense slide from gold towards Bitcoin.
That could see the transfer of billions of dollars. JP Morgan strategists said that if this kind of transfer happens, then prices of gold would drastically go down. Today, it is visible in the market that the prices of Bitcoins are good and rising with the tide.