- JPMorgan analysts have said they believe an increased appetite from institutional investors fueled the Bitcoin rally.
- “Institutional investors seem to be moving back to Bitcoin, maybe they see it as better inflation protection than gold,” JPMorgan said.
- According to the big bank, money flows from gold and bitcoin.
Bitcoin surpassed $ 1 trillion in market cap yesterday when the dollar price of 1 BTC surged above $ 55,000. Big US bank JPMorgan said in a statement today, according to a report by Markets Insider, that a number of factors could fuel the rally, including the appetites of institutional investors, assurances that the US will not ban BTC, and the recent rise of the lightning Network.
“The resurgence of inflation concerns among investors has renewed interest in using Bitcoin as an inflation hedge,” JPMorgan said. “Institutional investors seem to be moving back to Bitcoin, maybe they see it as better inflation protection than gold.”
The big bank added that the previous trend of institutional money flowing from gold into bitcoin has resurfaced in recent weeks, the report said. The affirmation of Bitcoin as a better store of value than gold by large investors has encouraged increased cash flow into BTC.
In addition to institutional players preferring BTC over gold for the store of value use case, JPMorgan shared two other factors that may have affected Bitcoin price.
Recent comments from Federal Reserve Chairman Jerome Powell have also encouraged investors to get into BTC. Powell said there was no intention of banning Bitcoin in the country, suggesting the US will not follow China’s moves.
“The recent rise of the Lightning Network and second-tier payment solutions, aided by the introduction of Bitcoin in El Salvador,” have also helped build confidence and scalability in the Bitcoin network, JPMorgan said.
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