JPMorgan has labeled Bitcoin as the “debasement trade,” suggesting that many investors might not be optimistic enough. The prominent investment bank doesn’t assign such nicknames casually. However, Bitcoin has demonstrated 17 years of remarkable resilience, and Wall Street is now acknowledging what the cypherpunks have always known: there’s no substitute when faith in fiat currencies dwindles. Whether we like it or not, the time for cautious optimism is behind us.
JPMorgan and the ‘debasement trade’
While Wall Street is known for its ambiguous language, JPMorgan’s recent comments strike closely to the heart of the issue. By identifying Bitcoin as the “debasement trade,” they are effectively warning their clients that in a world characterized by stimulus payments, soaring deficits, and interest rate cuts amidst ongoing inflation, holding onto cash or bonds is futile. To quote TFTC’s founder Marty Bent:
“You are not bullish enough.”
This isn’t about mere speculation any longer; it’s about safeguarding assets. As the dollar’s value continues to decline, Bitcoin’s finite supply and decentralized nature seem perfectly suited for this time.
With central banks engaging in questionable fiscal strategies and the U.S. government racking up annual deficits exceeding $2 trillion, “asset protection” now references digital scarcity rather than secure dividend stocks.
If JPMorgan’s institutional clients are investing in Bitcoin, it reflects their anticipation of an impending wave of debasement that no interest rate increase or fiscal commitment can reverse.
‘You grow yourself out of that debt’
Enter President Trump’s recent comments emphasizing that America “will grow [itself] out of that debt.” While optimism is part of political rhetoric, mere growth won’t eliminate trillion-dollar deficits overnight. Each crisis triggers new stimulus checks, rate cuts buoy markets while inflation lingers, and every solution appears to spawn additional problems.
Beneath this fiscal spectacle, Bitcoin continues to gain relevance. Each wave of monetary stimulus, every debt-induced spending spree, and every government shutdown that impacts key employment data serve as tailwinds for Bitcoin.
As Ecoinometrics notes, Q4 has traditionally been bullish for Bitcoin. Year-end portfolio adjustments, bonus checks seeking higher yields, and institutions maneuvering to anticipate the latest interest rate changes or stimulus announcements all contribute.
Last year’s ETF flows propelled the price from $60,000 to over $100,000. Should those flows reemerge, we could see Bitcoin soaring to $135,000 per coin by next month.
But that’s not all. Consider the analysts’ predictions for the year-end. Citigroup anticipates a Bitcoin price of $133,000, JPMorgan suggests $165,000, claiming Bitcoin is undervalued against gold, and Standard Chartered has set a staggering prediction of $200,000. As Bitwise CIO Matt Hougan commented:
“Q4 is going to be fun.”
Where macro meets momentum
Bitcoin is not merely a trade. It is steadily establishing itself as the “debasement hedge;” the asset with the most favorable asymmetric risk-reward ratio in a liquidity-dependent market.
Last year, the surge in ETFs granted Bitcoin its most impressive quarterly close, pushing it well beyond the crucial $100,000 threshold. All indicators suggest a repeat performance is likely, particularly with U.S. deficit spending and more Fed rate cuts anticipated for 2025, all while Bitcoin’s supply remains fixed at 21 million.
Let’s be clear: You are not bullish enough, and the data supports this. Over almost 17 years, Bitcoin has proven to be more resilient, more reliable, and indeed, more trustworthy than the very institutions once deemed symbols of financial security.
When JPMorgan regards Bitcoin as a primary defensive strategy, it signifies more than a bet on technology; it represents a challenge to the existing paradigm.
