The world’s largest cryptocurrency, Bitcoin, again seen a 35% surge this week, passing way beyond $50,000 resistance level and reaching towards a trillion-dollar market worth.
According to a note sent to clients by JPMorgan on Thursday, institutional investors seeking a hedge against inflation were primarily responsible for the recent spike in BTC’s price.
The analysts said that the glooming concern over the probable inflation within the investors’ community has reignited interest in the use of Bitcoin as an inflammation hedge, claiming that this has caused a shift in perception of BTC’s value in comparison to gold.
Institutions aren’t the only ones involved. Kevin O’Leary, the host of Shark Tank, has revealed that bitcoin now accounts for a larger portion of his portfolio than gold.
The surge in interest in Bitcoin contrasts with a JPMorgan analysis from May, which stated that large investors were moving away from Bitcoin and toward traditional gold.
JPMorgan also identified two other variables that it believes are driving the current rise.
- The recent assurances by US policymakers that they have no plans to follow China’s lead in outlawing cryptocurrency use or mining
- El Salvador’s embrace of Bitcoin has aided the creation of the Lightning Network and 2nd layer payment solutions.
Unlike other analysts this week, JPMorgan did not attribute the price rise to speculation about the impending approval of a Bitcoin future exchange-traded fund.
BTC is trading at $55,386.28, according to CoinMarketCap, at the time of writing.
Despite several JPMorgan divisions showing an increased interest in crypto assets and blockchain initiatives, CEO Jamie Dimon said in an interview on Monday that he is still skeptical of BTC, and compared it to a fool’s gold.
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