JPMorgan stated that institutional investors are returning to bitcoin, possibly because they see it as an inflation hedge better than gold.
According to the bank, money is flowing into bitcoin and out of gold. In a note, the big bank stated that institutional investors have returned to bitcoin and are now looking for ways to make money out of gold.
Yesterday’s $1 trillion market capitalization was surpassed by Bitcoin as the price of 1 BTC soared to $55,000. A Markets Insider report today revealed that JPMorgan, the U.S. bank, stated that there are a number of factors that may have fueled the rally. These include institutional investor appetite and assurances that the U.S. will not ban BTC.
JPMorgan stated that “the re-emergence of inflation worries among investors has revived interest in the use of bitcoin as an inflation hedge.” “Institutional investors may be turning to bitcoin to hedge against inflation, perhaps because it is more reliable than gold,” JPMorgan said.
According to the report, the bank stated that the previous trend of institutional money moving out of gold into bitcoin had reemerged in recent weeks. The recognition of bitcoin being a better store of value than gold by big investors has encouraged a greater flow of money to BTC.
JPMorgan also shared two factors that may have influenced the bitcoin price.
Recent comments made by Jerome Powell, the chair of the U.S. Federal Reserve, have encouraged investors to get in on BTC. Powell stated that there is no intention to ban Bitcoin in the country. This indicates that the U.S. will not follow China’s lead.
JPMorgan stated that the recent rise in popularity of the Lightning Network, 2nd layer payment solutions and El Salvador’s adoption of bitcoin have helped to increase confidence in the Bitcoin network’s ability to scale.
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