Bitcoin surged above the $ 50,000 resistance and posted a 35% gain for the week, slightly restoring a $ 1 trillion market cap.
BTC weekly chart | Source: Tradingview
According to a report shared with clients yesterday by US banking giant JPMorgan, the recent price spike for BTC is mainly due to institutional investors looking for inflation protection.
“The resurgence of inflation concerns has renewed interest in using Bitcoin as an inflation hedge,” the report said, arguing that perceptions of the value of Bitcoin, BTC versus gold, have shifted.
“Institutional investors seem to be returning to Bitcoin and may see it as a better hedge against inflation than gold.”
Companies are not alone in this way of thinking. Shark Tank star Kevin O’Leary stated earlier this week that cryptocurrencies now make up a larger proportion of his portfolio than gold.
This is in contrast to a report by JPMorgan in May which experts found that large investors were switching from Bitcoin to gold at the time.
JPMorgan provided two other factors which it believes are the main drivers behind the current rally:
“Recent assurances from US politicians that they do not intend to follow China’s example in banning the use or mining of cryptocurrencies,” and “The recent rise of the Lightning network and Layer 2 payment solutions that helped introduce Bitcoin in Helped El Salvador. “
Unlike other analysts, JPMorgan did not name speculation about the upcoming approval of the Bitcoin Futures ETF in October as a major driver of the uptrend.
Although several parts of JPMorgan have shown a growing interest in crypto assets and blockchain initiatives, CEO Jamie Dimon stated in an interview on September 22 that he is still skeptical of Bitcoin and even compared it to “a bit of stupidity.”
But the dog kept barking and the caravan moved on.
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Qin Shi Huang
According to Cointelegraph