Bitcoin (BTC) has gained 35 percent this week, breaking the $ 50,000 resistance and becoming an asset with a $ 1 trillion market capitalization again.
According to the statement shared by JPMorgan with its clients on Thursday, the biggest factor behind the recent surge in the price of BTC is institutional investors looking to hedge against inflation.
“Inflation concerns that have resurfaced among investors have resurfaced Bitcoin as a hedge against inflation,” analysts said, suggesting a shift in perception about the true value of BTC compared to gold.
“Institutional investors seem to be coming back to Bitcoin, perhaps because they see it as a better hedge against inflation than gold.”
Institutional investors are not alone in these decisions: Shark Tank star Kevin O’Leary recently stated that cryptocurrencies now take up more space in your portfolio than gold.
This interest from institutional investors in Bitcoin once again contradicts the report published by JPMorgan in May. Analysts at the giant bank suggested in the report in question that large investors exited Bitcoin and turned to gold.
The implicit endorsement of Bitcoin by major banks and regulators will accelerate the collapse of #Gold and the emergence of #Bitcoin as the preferred safe haven store of value for institutional and retail investors.
– Michael Saylor⚡️ (@michael_saylor) October 7, 2021
JPMorgan believes there are two more factors behind the latest rally:
“American politicians have assured that they cannot follow China in banning the use and mining of cryptocurrencies,” the analysts added, adding:
“The adoption of Bitcoin in El Salvador has also triggered the growth of the Lightning Network and layer 2 payment solutions.”
Bitcoin is trading at $ 54,140 at time of translation.
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