Institutional Investors Dump Gold for Bitcoin Seeing It as Better Inflation Hedge – Markets and Prices Bitcoin News
Global funding financial institution JPMorgan says institutional traders are returning to bitcoin, seeing the cryptocurrency as a greater hedge than gold. The agency’s analysts describe three key drivers boosting the worth of bitcoin in latest weeks, together with assurances that U.S. policymakers is not going to ban cryptocurrencies.
JPMorgan Sees Renewed Interest in Bitcoin
Institutional traders look like returning to bitcoin maybe seeing it as a greater inflation hedge than gold.
The analysts defined that there are three key drivers pushing the worth of bitcoin from about $40K to about $55K in a brief time frame. The worth of bitcoin is $53,853.14 on the time of writing based mostly on knowledge from Bitcoin.com Markets.
The first is “The recent assurances by U.S. policymakers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies.” Both Federal Reserve Chairman Jerome Powell and SEC Chairman Gary Gensler advised Congress this week that they’d no intention to ban cryptocurrency as China did. The SEC chief mentioned his company is taking a distinct strategy to China, specializing in investor safety and regulation.
The second motive is “The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption,” JPMorgan detailed. El Salvador made bitcoin authorized tender in early September. The nation has purchased 700 BTC and President Nayib Bukele claimed that 3 million Salvadorans are already utilizing the federal government’s bitcoin pockets, Chivo.
The third motive is:
The re-emergence of inflation considerations amongst traders has renewed curiosity within the utilization of bitcoin as an inflation hedge.
JPMorgan additional defined that the pattern of funds flowing out of gold into bitcoin has reemerged in latest weeks. In May, the agency noticed the alternative pattern the place funds flowed out of BTC into gold.
According to the agency, greater than $10 billion has flowed out of gold exchange-traded funds (ETFs) for the reason that starting of the 12 months. During the identical time interval, greater than $20 billion has flowed into bitcoin funds.
Noting that these flows of funds into bitcoin helped push BTC’s share of the overall crypto market to almost 45% from a low of 41% in mid-September, the analysts concluded:
The improve within the share of bitcoin is a wholesome growth as it’s extra more likely to replicate institutional participation than smaller cryptocurrencies.
Meanwhile, JPMorgan CEO Jamie Dimon believes that bitcoin has no intrinsic worth and regulators will “regulate the hell out of it.” His funding financial institution, nonetheless, is presently providing a number of crypto investments to shoppers.
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