JPMorgan are forecasting a major outflow of capital from gold into bitcoin, according a recent article by Bloomberg. In November, gold-backed ETFs and similar products (gold ETFs) recorded their first net outflows in twelve months and second largest monthly outflows ever, according to the World Gold Council. That also happens to be the same month the price of bitcoin went up 43%.
With Bloomberg noting that “The trend poses a problem for bulls in precious metals markets over the coming years if investors move, even a small slice, of their allocations away from gold and into crypto.”
Indeed, with the recent all time high in bitcoin prices being relatively unnoticed by mainstream media, the rise in prices seems to be more structural than based on mania as per the last all time high in 2017. Indeed, the Google search volume for bitcoin recently has barely moved compared to the last peak. This does not bode well for gold’s safe haven status, with bitcoin now being taken seriously by institutional investors.
According to Bloomberg “JPMorgan’s calculations suggest Bitcoin only accounts for 0.18% of family office assets, compared with 3.3% for gold ETFs. Tilting the needle from gold to bitcoin would represent the transfer of billions in cash…..If this medium to longer term thesis proves right, the price of gold would suffer from a structural flow headwind over the coming years”.
Many family offices are now stepping into bitcoin for the first time as it gains trust as a store of wealth. Given that gold has been the go-to store of value for generations, the fact that bitcoin is gaining this recognition for its wealth preservation properties is incredible.
At VAULTALP we enable family offices to safely move into bitcoin with a trusted, Swiss regulated partner. Many family offices understand the reasons to buy gold in Switzerland, so having the option to directly exchange physical gold into bitcoin offers our clients a complete service all under one roof, at much-reduced rates compared to using different brokers for gold and crypto. Get in touch today to see how VAULTALP can help you!