The Other Rotation – Gold-To-Crypto Flows Accelerate

A rebound in real yields (as nominal rates surge) has slammed the brakes on precious metals (even as the dollar dives)…

Source: Bloomberg

And as PMs suffer, cryptos are surging higher with Ethereum now back above $1200…

Source: Bloomberg

And, as JPMorgan previously noted, the ‘structural’ flow from gold to crypto continues…

Source: Bloomberg

JPMorgan’s goalseeked conclusion is clear:

we believe that the valuation and position backdrop has become a lot more challenging for bitcoin at the beginning of the New Year. While we cannot exclude the possibility that the current speculative mania will propagate further pushing the bitcoin price up towards the consensus region of between $50k-$100k, we believe that such price levels would prove unsustainable.

In other words, bitcoin may well triple from here, but it could also drop.