JPMorgan released a research report on Wednesday stating that geopolitical tension and the impending U.S. presidential election will likely support the ‘debasement trade,’ benefiting both bitcoin and gold. According to the analysts, a potential win by President Trump would further strengthen this trade through tariffs (geopolitical tensions) and an expansionary fiscal policy (‘debt debasement’).
If history repeats itself and the “Trump trade” unfolds similarly to 2016, JPMorgan predicts higher U.S. Treasury yields, a stronger dollar, U.S. stock market outperformance (especially in banks), and tighter credit spreads. However, as of now, these shifts have not yet materialized, with only slight movements observed in these markets.
