devaluation

According to CoinDesk, JPMorgan analyst Nikolaos Panigirtzoglou and others stated that as signs of easing tensions in the Middle East emerge, investors are gradually withdrawing from the Bitcoin and gold markets. The "devaluation trade" that had driven demand for both is losing momentum.In the past two weeks, both Bitcoin and gold-related ETFs have seen significant outflows, and institutional positions in the CME futures market have also weakened simultaneously. This trend indicates that investors are retreating from the macro hedging trades that had become popular due to inflation concerns and global instability, and it is not that Bitcoin funds are shifting to gold, but rather that both asset classes are facing a simultaneous decline in demand. Since the Iran conflict, Bitcoin has been a major representation of the "devaluation trade."

J.P. Morgan analysts, including Nikolaos Panigirtzoglou, stated that as signs of easing tensions in the Middle East emerge, investors are gradually withdrawing from the Bitcoin and gold markets. The "devaluation trade" that previously drove demand for both is losing momentum.In the past two weeks, both Bitcoin and gold-related ETFs have seen significant capital outflows, and institutional positions in the CME futures market have also weakened concurrently. This trend indicates that investors are retreating from the macro hedging trades that became popular due to inflation concerns and global instability, and it is not a case of Bitcoin funds shifting to gold; rather, both asset classes are facing a simultaneous decline in demand. Since the Iran conflict, Bitcoin has been a major representation of the "devaluation trade."

According to The Block, JPMorgan analysts have stated that Bitcoin is gradually surpassing gold as a currency devaluation hedge tool following the Iran conflict.Analysts led by Managing Director Nikolaos Panigirtzoglou noted that Bitcoin ETFs recorded inflows for the third consecutive month in May, while gold ETFs are still struggling to recover the funds that flowed out during the outbreak of the Iran conflict in March. This indicates that since the conflict began, retail investors are choosing Bitcoin over gold for devaluation hedge trades.The analysts stated that Bitcoin purchases are not limited to retail investors through ETFs. JPMorgan's position proxy indicators based on CME Bitcoin futures and offshore perpetual futures have also reached new highs, indicating that institutional investors are similarly increasing their exposure. The momentum signals for Bitcoin and gold have also rebounded since the conflict began. Investors are also indirectly buying Bitcoin through Strategy, with the company's purchase volume potentially reaching around $30 billion this year if the current pace is maintained.

According to CoinDesk, Liz Truss, the former Prime Minister of the UK with the shortest term, stated in an interview that the UK economy is on a "very negative trajectory," with high taxes, excessive regulation, and energy costs making it so that the risks for entrepreneurs "often do not justify the returns." She attributed inflation and wealth inequality to "currency devaluation" and pointed out that discussions about monetary policy within the government have become "taboo," a phenomenon that is "quite disturbing."Truss expressed that she is "very interested" in Bitcoin, believing it to be an important tool against currency devaluation and to resist centralized financial control, and revealed that she had come into contact with Bitcoin as early as during her time as Chief Secretary to the Treasury.She is currently actively preparing for CPAC UK, planning to hold a three-day conference to unite entrepreneurs and activists to promote the "sovereignty and freedom" movement, stating bluntly: "There are only two choices, either sink or change completely."

According to Jinshi reports, due to market concerns about U.S. President Trump’s intention to seize Greenland from Denmark, relations between the U.S. and Europe are tense, and the dollar is weakening.Trump stated that starting from February 1, he will impose a 10% tariff on several European countries, and the European Union is considering retaliatory tariff measures. Analysts at Barclays Bank pointed out that the tension may prompt foreign investors to increase hedging against the risk of dollar depreciation, and the dollar may continue to be under pressure in the short term.

Galaxy research director Alex Thorn stated on the X platform that for Bitcoin to achieve positive returns in 2025, its price must close above $93,389 on the last day of the year. However, the sentiment among Bitcoin investors is undoubtedly quite low at the moment, though some portfolio managers may reconsider Bitcoin in January 2026. This year, Bitcoin has received many positive news, and this "good news" seems to have become the norm. Despite a lackluster performance at the end of the year, the performance of U.S. Bitcoin ETPs has been much more stable, with cumulative inflows only down 9% since reaching a historical high of $62 billion in October, further highlighting the increasing maturity of this asset class.Galaxy believes that it may only be a matter of time before Bitcoin follows gold as a hedge against currency devaluation, potentially igniting interest from several large asset allocators and central banks.

ChainCatcher news, according to Jinshi reports, the political and fiscal uncertainties of the world's largest economies (including the United States, France, and Japan) have intensified, leading investors to sell off assets in dollars, euros, and yen, and turn to alternative assets such as Bitcoin, gold, and silver. Wall Street refers to this phenomenon as "devaluation trading," a strategy that investors adopt to protect themselves from the effects of currency devaluation. Although opinions on this trend vary, its supporters believe that this phenomenon is gaining momentum, reflecting the ongoing issue of rising government debt.

ChainCatcher news, BitMEX co-founder Arthur Hayes stated that the new popular narrative in TradFi is "debasement trade." It took them nearly twenty years to notice. Don't think they will forget about this because of Bitcoin's "four-year cycle." Now it's the bankers' turn to sell clients derivatives of gold, cryptocurrencies, and tech stocks.The so-called "debasement trade" refers to investors seeking to protect wealth or gain returns by allocating asset portfolios in an environment of currency devaluation. It typically involves investing in asset classes that perform well during periods of inflation or currency devaluation.

ChainCatcher news, Bitwise's latest report expects that the inflow of the U.S. spot Bitcoin ETF will hit a record in the fourth quarter of this year, exceeding the total inflow of $36 billion in 2024.Bitwise Chief Investment Officer Matt Hougan stated that the Bitcoin ETF will benefit from three catalysts: the entry of wealth management firms, the recent surge in Bitcoin prices, and the effectiveness of "devaluation trades." It is anticipated that many Wall Street advisory firms will add gold and Bitcoin to client portfolios to capture stronger-performing assets.

ChainCatcher news, according to Daily Hodl, macro expert Luke Gromen stated that the rise of Bitcoin treasury companies is a reasonable response to the U.S. government's ongoing devaluation of the dollar. In his latest video update on YouTube, Gromen pointed out that investors are reacting to a massive financial bubble that has shifted from the stock, banking, and real estate markets to the treasury market.He believes that the only way for the U.S. government to maintain the bubble is by devaluing its debt through inflation, rather than restoring fiscal health by facing default or severe economic recession. In light of this reality becoming clear, it makes sense for many companies to create shareholder value by leveraging Bitcoin's strict supply cap.

ChainCatcher news, according to Cointelegraph, GameStop CEO Ryan Cohen believes that Bitcoin is a hedge against currency devaluation. Ryan Cohen stated, "If Bitcoin becomes digital gold, there is still more room for growth."

ChainCatcher news, according to Jinshi reports, Ray Dalio, the founder of the world's largest hedge fund Bridgewater, recently warned the Trump administration that if it does not immediately commit to reducing the deficit, the United States may face a significant debt crisis within the next three years. Dalio stated, "It's like a heart attack------you are gradually approaching danger. My guess is about three years, with a margin of error of about a year."In the face of currency devaluation risks, Dalio believes that investors must seek "alternatives with stable supply." He specifically pointed out the advantages of Bitcoin: "Unlike real estate, Bitcoin cannot be easily seized or taxed."When asked if he is more optimistic about gold than ever, he gave an affirmative answer: "The current environment indeed enhances the allocation value of gold------but I want to emphasize that no one can accurately predict the future; what investors need is to build a moderately diversified portfolio."Dalio suggested that an allocation of 10%-15% in gold in a theoretical investment portfolio falls within the "prudent" range: "A small amount of gold can provide protection and achieve diversification. The key is to avoid over-allocating to any asset."

ChainCatcher news, according to The Block, analysts at JPMorgan, led by Nikolaos Panigirtzoglou, stated in a report on Friday that "the appreciation of gold prices over the past year has far exceeded the trends implied by changes in the dollar and real bond yields, likely reflecting a resurgence of this 'devaluation trade.'"They added that the record capital inflows into the cryptocurrency market in 2024 indicate that Bitcoin is also becoming "a more important component" of investors' portfolios.The devaluation trade refers to a strategy where investors turn to assets like gold and Bitcoin to hedge against the devaluation of fiat currencies, which is often driven by factors such as inflation, increasing government debt, and geopolitical instability.

ChainCatcher news, according to Bitcoin.com, Mexican billionaire Ricardo Salinas Pliego suggested buying Bitcoin to prevent the devaluation of fiat currency.It is reported that in 2021, Salinas Pliego called Bitcoin "extraordinary" and described it as "the gold of the modern world."

ChainCatcher message, due to the devaluation of local fiat currencies and overall economic instability, the recent rise in Bitcoin prices has led to historical highs in Turkey and Nigeria. As of Friday morning, the price of Bitcoin in the Turkish market reached 9.6 million lira, while in the Nigerian market, it reached 27.4 million naira. In local currency terms, Bitcoin's monthly increase has reached as high as 30%. According to CoinGecko, local cryptocurrency exchanges have seen a Bitcoin trading volume of $40 million in the past 24 hours, a figure that may not include local users trading on global exchanges like Binance or Coinbase.It is reported that in the past month, the naira has depreciated by 0.45% against the dollar, and over the past six months, it has fallen by 45%; the lira has dropped by 2.9% against the dollar in the past month and by 31% over the past six months. A study by the International Monetary Fund (IMF) shows that Nigeria's inflation rate has risen by 25% compared to 2022, while Turkey's inflation rate has surged by 51%, leading to a significant decline in the purchasing power of TRY and NGN. This may have boosted demand for Bitcoin.

Chain Catcher news, Messari senior analyst @dunleavy89 stated that in the face of currency devaluation crises, the vast majority of euro and pound holders choose to buy BTC to maintain purchasing power, a trend that did not occur during crises before 2020 or 2021.In addition, Ethereum has not shown such a trend, and compared to the past two years, ETH's recent trading volume is quite insignificant. (Source link)