Money has poured into bitcoin funds and out of gold since October, a trend that’s only going to continue in the long run as more institutional investors and family offices take a position in cryptocurrencies. That was the conclusion of an investor note from J.P. Morgan’s quantitative strategists.

“The adoption of bitcoin by institutional investors has only begun, while for gold its adoption by institutional investors is very advanced,” wrote Nikolaos Panigirtzoglou, a managing director at J.P. Morgan.

According to the bank’s calculations, bitcoin accounts for only 0.18% of family office assets, while gold ETFs account for 3.3%. Tilting the needle from gold to bitcoin would mean transferring billions in cash.

As cryptocurrencies become more mainstream for institutional investors and family offices, their adoption will come at the expense of gold, Panigirtzoglou said. J.P. Morgan is one of the few Wall Street banks that’s predicting the major shift out of gold and into crypto.

To capture more of the bitcoin market, Morgan Stanley was the first big U.S. bank to announce it would allow advisors to offer three crypto ETFs to wealthy clients (those with at least $2 million in portfolio assets at the firm). Fidelity is the first U.S. firm to announce it had filed with the Securities and Exchange Commission to create a bitcoin-based ETF.

The Grayscale Bitcoin Trust, a listed security popular with institutions, has seen inflows of almost $2 billion since October, while exchange-traded funds backed by gold saw outflows of $7 billion, J.P. Morgan said.

Goldman Sachs said in a recent report that 40% of its clients have gained some exposure in bitcoin.

While some analysts are expecting a migration of billions of dollars from stocks to bonds by the end of March as asset management firms rebalance their portfolios, the moves by U.S. banks and ETF managers are raising the expectation that the money flowing out of the stock market won’t end up solely in bonds.  

Some of the world’s largest hedge fund managers are buying bitcoin to hedge inflation rates. Billionaire hedge fund managers Ray Dalio, Stan Druckenmiller and Paul Tudor Jones have all announced they’ve taken positions in bitcoin, noting that other traditional safe havens like bonds lag performance.

U.S. bond prices actually declined March 24, led by the fall in the U.S. 10-year Treasury note, which sent its yields up to around 1.617% from 0.917% at the start of 2021.

While institutional managers worry that massive inflows into bitcoin could harm performance, Dalio has another concern: that the U.S. government could outlaw bitcoin like it once banned gold in the 1930s.

Dalio told Yahoo Finance that debates in India about banning bitcoin altogether were a sign of growing concerns. U.S. regulators have given no indication they plan to ban bitcoin or the crypto asset class in general, but the approval process of Fidelity’s bitcoin ETF will be worth following.