Bitcoin (BTC) led a 35% rally this week, surpassing $ 50,000 resistance and bringing the asset’s market value to $ 1 trillion.

According to a note that JPMorgan shared with customers on Thursday, the recent rise in the price of BTC is mainly due to institutional investors wanting to hedge against inflation.

“The rise of inflation problems among investors has revived interest in using bitcoin as a hedge against inflation,” said analysts, noting that there has been a shift in perceptions of the benefits of bitcoin over gold.

“Institutional investors seem to be returning to Bitcoin, and may see it as a better inflation hedge than gold.”
Not just institutions: Shark Tank star Kevin O’Leary said earlier this week that cryptocurrency now represents a larger share of his portfolio than gold.

The pressure for bitcoin contrasts with a JPMorgan report in May, when analysts noted that large investors switched from bitcoin to traditional gold at the time.

JPMorgan unveiled two other factors that it believes are behind the current convention:

Analysts noted “recent assurances from US politicians that they do not intend to follow China’s steps to ban the use or mining of cryptocurrencies,” and:

“The recent rise in Lightning Network and Layer 2 payment solutions has been driven by the adoption of Bitcoin in El Salvador.”
Unlike other analysts this week, JPMorgan did not mention speculation about the impending approval of the Bitcoin futures ETF as its primary price driver.

According to CoinMarketCap, BTC is currently trading at $ 53,884.76 at the time of writing.

RELATED: Research shows that the effect of cryptocurrency has a positive impact on portfolios

While some JPMorgan divisions are showing increasing interest in cryptocurrencies and blockchain initiatives, CEO Jamie Dimon said in an interview on October 22 that he is skeptical of BTC and even compares it to “stupid gold”.

Source: CoinTelegraph

LEAVE A REPLY