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Institutions buying Bitcoin rather than gold as inflation cranks up


08 Oct 2021

#Bitcoin

According to JPMorgan this week’s rally has been driven by institutional investors hedging against inflation with Bitcoin. Bitcoin (BTC) 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 for BTC was 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 of BTC in 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 crypto now accounts for a larger allocation in his portfolio than gold does. The momentum toward Bitcoin is in contrast to a JPMorgan report in May, when analysts noted big investors at the time were switching out of Bitcoin and into traditional gold.

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 the imminent approval of a Bitcoin futures ETF as a significant driver of the price. BTC 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 of BTC and even compared it to “a little bit of fool’s gold”.


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Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 89.2% 16 $66 008.53 0.43% -4.83% $1 301 189 948 082 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 78.4% 41 $3 550.56 4.03% -3.37% $423 949 263 016 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 96% 1 $0.999516 -0.01% -0.04% $112 505 427 241 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 80% 33 $605.24 1.60% -11.74% $89 323 205 919 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 81.2% 28 $144.26 1.67% -9.41% $66 605 969 054 SOL 7 days price change
6 USD Coin (USDC) USDC USD Coin predictions 95.2% 3 $1.000068 0% -0.01% $32 444 207 431 USDC 7 days price change
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15 TRON (TRX) TRX TRON predictions 85.6% 19 $0.115323 -0.57% 0.39% $10 065 733 271 TRX 7 days price change

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