Bitcoin (BTC) and gold bullion are more similar than thought. You can use them to protect your savings from inflation.
Can bitcoin replace gold? – This debate has been with us for several years. On one side, there are gold advocates like Peter Schiff and on the other, a host of investment bankers, managers and economists who confirm the narrative of Bitcoin as a gold substitute. In this article, we look at JPMorgan analyst Nikolaos Panigirtzoglou’s opinion on bitcoin and gold.
In his opinion, the precious metal could now face a years-long downward spiral thanks to Bitcoin.
Bitcoin takes share of gold in portfolio
According to analyst Nikolaos Panigirtzoglou, a paradigm shift in the investment policy of large institutions and family offices is imminent.
According to the report, the growing acceptance of the cryptocurrency Bitcoin (BTC) is increasingly leading institutional investors to invest part of their portfolios in Bitcoin. However, this in turn is happening to the detriment of gold, he said, as the allocation to the precious metal is decreasing in the process.
Nikolaos Panigirtzoglou works for the major U.S. bank JPMorgan in the field of quantitative analysis. In his opinion, the „bitcoin as digital gold“ narrative is taking hold more and more. This, in his opinion, means that gold is likely to lose the attention of investors over the next few years.
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0.18% BTC in the portfolio of family offices
In portfolio management, restructuring existing portfolio holdings is also known as reallocation.
This process is part of a reasonable portfolio management and ensures a desired balance of the individual positions.
Now Panigirtzoglou picks up on this aspect and said that just 0.18% on average of family office portfolios are invested in Bitcoin. This compares to a gold allocation of 3.3%. Taking this data as a starting point and assuming a small reallocation, this may provide fundamental tailwinds for the BTC price.
Literally, the JPMorgan analyst said:
The adoption of Bitcoin by institutional investors has just begun. For gold, on the other hand, adoption is well advanced. If my assumption is correct in the medium to long term, the gold price would suffer massively from this transition.
The fact is that companies like Grayscale impressively show how high the demand by institutional investors for Bitcoin is. The big names like MicroStrategy, Paypal and Cash also attracted a lot of attention this year.
In parallel, Bitcoin is trading stably above $18,000 despite recent corrections and is thus preparing for 2021.