Should Family Offices Consider Bitcoin as an Alternative to Gold?

Should Family Offices Consider Bitcoin as an Alternative to Gold?

Fear of Missing Out (FOMO)

One of the most bullish indicators for Bitcoin is when a skeptic becomes a believer. There have been several instances of individuals and institutions alike denouncing Bitcoin because it is counterintuitive to their financial interests, only to eventually hop aboard the train when they can no longer deny its potential. Possibly the most prominent example of this is chairman and CEO of JPMorgan Chase, Jamie Dimon. He clearly felt pretty strongly about Bitcoin in 2017 when he was quoted as saying, “If you’re stupid enough to buy it, you’ll pay the price for it one day.”

Fortunately, Bitcoin continued to climb since 2017 and JPMorgan Chase has entirely flipped their stance. This change in opinion can be seen in their Global Markets Strategy Report published on November 6th, in which they describe how The Grayscale Bitcoin Trust is outperforming gold exchange-traded funds (ETFs), a trend perhaps driven by institutional investors like family offices.

of , the potential long-term upside for bitcoin is considerable if it competes more intensely with gold as an ‘alternative’ currency given that the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment in gold via ETFs or bars and coins. This contract lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at bitcoin as an alternative to gold.”

This is indicative of several important bullish factors that may serve as the catalyst to drive price to all-time highs. An influx of institutional capital will be critical in the next market cycle, and reports like these provide the legitimacy that institutions are looking for. Previous bull runs have been driven by retail interest which is chump change when you compare it with the deep pockets of institutional players. The amount of money tied up in gold still dwarfs Bitcoin, but there is good reason to believe that this won’t always be the case.

Big Players Going All In

It is fun to go back and look at some tweets from big names and see how their stance has held up. Let’s go back to November when the debate of Bitcoin vs gold played out on Raoul Pal’s twitter, on which he announced he will be moving out of gold and into BTC and ETH. Raoul has been bullish on Bitcoin, but the conviction to move all in is something that surprised many of his followers.

Obviously, this worked out pretty well for Raoul.

There has been a lot of talk about how this Bitcoin bull run feels different than the bull run of 2017, and that can largely be attributed to the presence of institutions and big players like Raoul Pal. The drawbacks we are seeing now pale in comparison to the drawbacks we have seen in the past. The money is far less fickle this time around. These big names are putting BTC and ETH on their balance sheets for the long term, a trading strategy that has been highly successful for HODLers of the past.

Charting at marketrebellion.com/trycrypto

Source: https://www.scribd.com/document/483461013/JPM-Flows-Liquidity-2020-11-06-3551924#download&from_embed