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 it to protect your savings from inflation. The picture shows gold bars and Bitcoin coins.

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 side a multitude of investment bankers, managers and economists who confirm the narrative of Bitcoin Future as a gold substitute. In this article we take a look at JPMorgan analyst Nikolaos Panigirtzoglou’s opinion on Bitcoin and gold .

In his opinion, thanks to Bitcoin, the precious metal could now face a year-long downward spiral.

Bitcoin takes over shares of gold in the portfolio

According to the analyst Nikolaos Panigirtzoglou, a paradigm shift is imminent in the investment policy of large institutions and family offices.

Accordingly, the increasing acceptance of the cryptocurrency Bitcoin (BTC) is increasingly leading institutional investors to invest part of their portfolios in Bitcoin. However, this in turn makes gold suffer, as the allocation to the precious metal decreases.

Nikolaos Panigirtzoglou works for the American bank JPMorgan in the field of quantitative analysis. In his opinion, the „Bitcoin as digital gold“ narrative is becoming increasingly popular. In his opinion, this 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, a restructuring of existing portfolio shares is also called a reallocation.

This process is part of sensible portfolio management and ensures that the individual positions are balanced.

Now Panigirtzoglou takes up this aspect and said that an average of 0.18% of the family office portfolios are invested in Bitcoin. In contrast, there is a gold share of 3.3%. If you take this data as a starting point and assume a small reallocation, this can mean a fundamental tailwind for the BTC price.

Literally, the JPMorgan analyst said:

The adoption of Bitcoin by institutional investors has only 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 change.

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

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