JPMorgan says investors fleeing to gold after Bitcoin dipped to near $30,000 🚨 This article is 4 years old...
News ▸ US ▸ Bitcoin ▸ Investments
JPMorgan says investors fleeing to gold after Bitcoin dipped to near $30,000
Bitcoin's extreme volatility and crazy price swing might've pushed institutional investors back into the safety of gold, said JPMorgan's research note.
2 min read
Updated: May. 20, 2021 at 7:56 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Institutional investors are turning away from Bitcoin amid the latest massive sell-off on the crypto market—and allocating their capital back in gold, according to a note written by research analysts at American investment bank JPMorgan Chase.
“The Bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors. Over the past month, Bitcoin futures markets experienced their steepest and more sustained liquidation since the Bitcoin ascent started last October,” analysts at the bank said.
A shift towards gold
Per Business Insider’s report published today, JPMorgan’s research note pointed out that there was a shift in institutional investors’ crypto strategies over the past few months. During the course of Q1 2021, flows of institutional funds into Bitcoin have been gradually slowing down and ultimately turned negative in early April.
It is not entirely clear why this happened, the researchers noted. One of the possibilities is that Bitcoin’s extreme volatility—that was especially evident over the past few days—combined with fears of inflation have made the crypto a less attractive proposition in comparison to gold.
“Or they perhaps view the current Bitcoin price as too high relative to gold and thus do the opposite of what they did in the previous two quarters, i.e. they sell Bitcoin and buy gold,” the researchers said.
Too early to panic
At the same time, Bitcoin’s momentum is still positive in the long term, they noted, as it’s still too early to say that BTC is oversold.
“It is perhaps too early to characterize Bitcoin as oversold,” said the note, adding, “What is striking is that the recent outflows from Bitcoin funds have been accompanied by inflows into gold ETFs in a reversal of the last quarter of 2020 and the beginning of this year.”
As CryptoSlate reported, Bitcoin and most other cryptocurrencies plunged by roughly 40-50% today amid a massive sell-off. This led to nearly $9 billion lost in liquidated trading positions across the board.
Mentioned in this article
Author 
Liam Frost
Liam Frost is a freelance journalist and editor with over 15 years of experience working for various media outlets across the world.
Latest US Stories
Latest Bitcoin Stories
Featured Story
Advertise Here
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
JPMorgan
JPMorgan Chase & Co is a global leader in financial services, offering solutions to the world’s most important corporations, governments, and institutions in more than 100 countries.