JPMorgan says Bitcoin is a risk indicator for investor sentiment
Bitcoin's pressure alongside gold rallies may signal shifts in investor sentiment or expectations for a steeper yield curve.
Key Takeaways
- JPMorgan’s Jack Caffrey sees Bitcoin as a risk indicator.
- The analyst finds it interesting when Bitcoin lags while gold rallies, questioning its “risk-free” status.
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Jack Caffrey, JPMorgan’s portfolio manager, said Tuesday that Bitcoin is one of several risk indicators investors can watch to gauge market risk.
Speaking with CNBC’s Squawk Box this morning, he highlighted the recent divergence between Bitcoin and gold, noting that weeks of Bitcoin weakness alongside rallies in gold have raised questions about Bitcoin’s role as a “risk-free” asset.
The portfolio manager suggested multiple factors could explain the divergence, including whether “investors are looking at the prospect of a steeper yield curve supporting gold.”
“If I shift my focus to the equity market where I’m a little bit spending much more of my time. It’s certainly an interesting environment where you see leadership from interactive media names like say Alphabet and pharmaceutical names like Johnson and Johnson,” Caffrey said. “Like one is risk off and one is perceived as risk on…I think it speaks to some of the confusion investors are attempting to navigate as we come into year-end.”
JPMorgan has recently turned bullish on Bitcoin as a macro asset, introducing structured notes linked to Bitcoin ETFs. The bank plans to allow institutional clients to use Bitcoin and Ether as loan collateral by year-end.
