Michael Saylor, founder and chairman of MicroStrategy, said: “We have a #Bitcoin President”.
As the dust settles from the recent US presidential election, Donald Trump‘s victory has sent ripples through financial markets. JPMorgan analysts predict that both gold and bitcoin are poised for significant gains, highlighting the “debasement trade”.
The debasement trade is an investment strategy where investors turn to assets like gold and bitcoin to hedge against the weakening of a currency. This typically occurs during times of inflation or when governments adopt expansionary fiscal policies that increase debt and devalue the currency.
“The debasement trade “is likely to be reinforced by both tariffs and geopolitical tensions as well as an expansionary fiscal policy,” wrote JPMorgan’s managing director Nikolaos Panigirtzoglou in a report released on Wednesday. “After all, Bitcoin, the other component of the ‘debasement trade’ rallied after the Trump win.”
The price of Bitcoin skyrocketed to an all-time high of $76,200 on November 6, the day Trump’s victory was confirmed. Currently trading around $75,100, Bitcoin’s surge reflects market anticipation of favorable policies under the new administration.
Michael Saylor, founder and chairman of MicroStrategy, the largest public corporate holder of Bitcoin, shared his enthusiasm on X, posting alongside a photo of a Bitcoin flag atop the White House:
“We have a #Bitcoin President.”
MicroStrategy’s Ambitious $42 Billion Investment
Adding fuel to the bullish outlook, MicroStrategy has unveiled an aggressive bitcoin acquisition strategy dubbed the “21/21 plan”. The company aims to raise $42 billion over the next three years – $21 billion from equity and $21 billion from fixed-income securities – to invest in Bitcoin.
“For 2025 alone MicroStrategy would be investing $10 billion into bitcoin which is roughly equal to its cumulative purchases so far since mid-2020!” noted JPMorgan analysts. This substantial investment is expected to significantly impact Bitcoin’s market dynamics.
Trump’s pro-crypto stance has attracted international attention. Leaders like Nayib Bukele, President of El Salvador, a country that adopted Bitcoin as legal tender, have congratulated Trump, highlighting the global implications of US crypto policy changes.
His promises include firing SEC Chair Gary Gensler, establishing a National Bitcoin Reserve, and eliminating capital gains tax on Bitcoin transactions. These pledges have stirred hope for a more favorable regulatory environment in the United States.
The Role of Central Banks and Gold
JPMorgan analysts also emphasize the importance of central bank activities in shaping the future of gold. After significant gold purchases in 2022 following the Ukraine conflict and sanctions on Russia, central banks like China’s have paused acquisitions. However, ongoing geopolitical tensions may prompt renewed diversification away from dollar reserves into gold.
Retail investors have been increasing their holdings in both gold and Bitcoin, with heightened investments in ETFs since last summer. JPMorgan expects this trend to continue into 2025, further supported by Trump’s policies that favor alternative assets.
When questioned about a 2025 price target for Bitcoin, Panigirtzoglou stated they “are positive on Bitcoin into 2025”, but refrained from specifying a figure. The combined effect of policy changes, corporate investments, and global market dynamics suggests a bullish horizon for both Bitcoin and gold.
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