Investors Bet on Bitcoin and Gold Ahead of Election

Retail investors have been busy snapping up bitcoin and gold before the upcoming U. S. presidential election, expecting potential benefits if former President Trump wins. According to a report from JPMorgan, these investors are part of the "debasement trade, " where they buy these assets to hedge against fiscal and monetary policies that might weaken the dollar and raise inflation. With the election race tight between Trump and Kamala Harris, investors are watching the government deficit closely, which has risen to $1. 8 trillion in the 2024 fiscal year. Bitcoin ETFs saw a massive $1. 3 billion inflow in the first two days of this week alone, making October the third-largest month for net inflows since the January launch of bitcoin funds. Retail investors are also showing a keen interest in meme and AI-related tokens, indicating their bullish sentiment. However, institutional investors seem to be taking a break, with CME bitcoin futures showing little activity over the past two weeks. Analysts warn that bitcoin futures are currently overbought and might face vulnerability soon. Gold is in a similar situation, with retail investors continuing to buy gold ETFs while institutional activity in gold futures remains stagnant. The focus on these safe-haven assets ahead of the election underscores investors' concerns about the economic policies that could emerge from the election results.