Geopolitical Tensions and U.S. Presidential Election Set to Impact Bitcoin and Gold

Geopolitical tension and the upcoming U.S. presidential election will likely underpin the ‘debasement trade,’ and this favors both bitcoin and gold, according to a recent research report by JPMorgan.

The analysts at JPMorgan stated that a potential Trump win in the upcoming election could have a significant impact on the ‘debasement trade.’ This trade is expected to be reinforced through tariffs, which could lead to geopolitical tensions, and an expansionary fiscal policy that could result in ‘debt debasement.’

If history repeats itself and the “Trump trade” unfolds similarly to 2016, we could see higher U.S. Treasury yields, a stronger dollar, U.S. stock market outperformance (especially within the banking sector), and tighter credit spreads. However, as of now, these market shifts have not yet materialized, with only minor movements observed.

The analysts also highlighted that a Trump win could be beneficial for bitcoin from a regulatory standpoint, further strengthening its position in the market. This, combined with the ongoing geopolitical tensions and potential fiscal policies, could create a favorable environment for both bitcoin and gold as investors seek safe-haven assets.

As we approach the U.S. presidential election and navigate through uncertain geopolitical landscapes, it will be interesting to see how these factors play out and influence the market dynamics of both bitcoin and gold.