Bitcoin as a gold substitute? – JPMorgan analyst sees BTC at an advantage

Bitcoin (BTC) and gold bars are more similar than expected. You can use them to protect your savings against inflation. On the picture you can see gold bars and Bitcoin coins.

Can Bitcoin replace gold? – This debate has been with us for several years. On the one hand, there are gold advocates like Peter Schiff and on the other hand, a multitude of investment bankers, managers and economists who confirm Bitcoin Evolution the narrative of Bitcoin as a gold substitute. In this article we look at the views of JPMorgan analyst Nikolaos Panigirtzoglou on Bitcoin and gold.

In his opinion, thanks to Bitcoin, the precious metal could now face years of downward spiral.

Bitcoin takes over gold shares in its 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 crypto-currency Bitcoin (BTC) is increasingly leading institutional investors to invest part of their portfolios in Bitcoin. This, however, is happening to the detriment of gold, as the allocation to the precious metal is decreasing.

Nikolaos Panigirtzoglou works for the major American bank JPMorgan in the field of quantitative analysis. In his opinion, the „Bitcoin as digital gold“ narrative is becoming increasingly relevant. In his opinion, this leads to the fact that gold will probably lose the attention of investors over the coming years.

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0.18% BTC in the portfolio of family offices

In portfolio management, a restructuring of existing portfolio shares is also known as reallocation.

This process is part of a sensible portfolio management and ensures a desired balance of the individual positions.

Now Panigirtzoglou takes up this aspect and says that on average only 0.18% of family office portfolios are invested in Bitcoin. This compares with a gold share of 3.3%. Taking this data as a starting point and assuming a small reallocation, this can provide a fundamental tailwind for the BTC price.

The JPMorgan analyst said

The adoption of Bitcoin by institutional investors has only just begun. For gold, however, the adoption is well advanced. If my assumption is correct in the medium to long term, the gold price would suffer massively from this change.

The fact is that companies such as Grayscale show impressively how high the demand for Bitcoin by institutional investors is. Big names like MicroStrategy, Paypal and Cash also attracted a lot of attention this year.

At the same time, despite recent corrections, Bitcoin is still trading steadily above $18,000 and is thus preparing for 2021.