Bitcoin () has led a 35% rally this week by soaring far above the $50,000 resistance level and restoring a $1 trillion market capitalization to the asset.
According to a note shared by JPMorgan with clients on Thursday, the recent increase in price forwas predominantly attributed to institutional investors looking for a hedge to inflation.
«The re-emergence of inflation concerns among investors has renewed interest in the usage of Bitcoin as an inflation hedge,» the analysts said, arguing there has been a shift in perception as to the merits ofin relation to gold.
«Institutional investors appear to be returning to Bitcoin perhaps seeing it as a better inflation hedge than gold»
Institutions aren’t alone there: Shark Tank star Kevin O’Leary stated earlier this week that
The momentum toward Bitcoin is in contrast to a JPMorgan report in May, when analysts noted.
The implicit endorsement of Bitcoin by major banks and regulators is going to accelerate the collapse ofand the rise of as the preferred safe-haven store of value for both institutional and retail investors.
— Michael Saylor⚡️ (@michael_saylor)
JPMorgan provided two other factors it believes are behind the current rally:
«The recent assurances by US policy makers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies,» the analysts noted, as well as:
«The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s Bitcoin adoption.»
Unlike other analysts this week, JPMorgan did not cite speculation around theas a significant driver of the price.
now trades at $53,884.76 according to CoinMarketCap at the time of writing.
Despite some divisions of JPMorgan expressing a growing interest in crypto assets and blockchain initiatives, CEO Jamie Dimon stated in an interview on Oct. 22 that he remains a skeptic ofand even .