Soaring gold demand signals waning confidence in crypto — JPMorgan

Investors are now turning back to gold as their key safe-haven asset, JPMorgan said in a report released Thursday. The bank noted that significant capital is moving out of Bitcoin into exchange-traded funds (ETFs) and precious metals derivatives as global trade tensions and economic uncertainty gain momentum.

Despite being dubbed "digital gold", the cryptocurrency has failed to benefit from the growing demand for safe-haven assets. The price of bullion recently hit an all-time high of over $3,357, while Bitcoin has fallen more than 20% from its January peak of $109,000 and is currently trading around $85,000.

While crypto ETFs outperformed gold ones in December, there have been notable outflows from the digital currency funds since January. Unlike precious metals, Bitcoin actively mimics trends in the tech industry. This makes it less of a safe-haven asset, JPMorgan commented. 

As investors return to more traditional hedging strategies in times of crisis, the bank's analysts suggest that the market is overestimating the importance of cryptocurrencies.