Bitcoin was leading this week’s rally with a 35% rise. It took Bitcoin way beyond the $50,00 resistance level. The successful run has now restored a $1 trillion market capitalization to Bitcoin. In light of these developments, JPMorgan shared a note with clients on Thursday. The note indicated that the meteoric rise is fueled by more and more institutional investors seeking a hedge to inflation. The analysts claimed that as concerns about inflation emerge once more, more investors than ever are looking at Bitcoin as a hedge against inflation. Experts also believe that many people are now comparing Bitcoin with gold as an investment option. For many Bitcoin veterans, this was a prediction made long back.
Not just institutional investors, even retail investors are leaning more towards Bitocin compared to gold. For instance, Shark Tank fame Kevin O’Leary revealed that his portfolio has a bigger share of Bitcoin than gold.
Analysts from JPMorgan have given two primary reasons for this recent inclination towards Bitcoin and move away from gold. First, the United States authorities have made it abundantly clear that there is no prospect of the government banning crypto. These fears were at an all-time high when China decided to ban all crypto transactions. The other contributing factor is the growth of the lighting network and 2nd layer payment solutions. El Salvador’s Bitcoin adoption fuels these two technological innovations. While some analysts also added the prospective approval of Bitcoin ETF futures as another reason, JPMorgan analysts do not agree on that.
