Investors Prefer Bitcoin Over Gold, According to JP Morgan

Major multinational investment bank JPMorgan recently revealed its reasons for why Bitcoin is surging this week. Among these are its attractiveness to institutional investors as an inflation hedge that is superior to gold.

JP Morgan’s Analysis on BTC Price Growth

The investment bank gave their analysis of the crypto’s price in a note shared Thursday, as reported by Markets Insider. They list 3 main reasons Bitcoin broke through key resistance levels this week, reclaiming its trillion-dollar market cap.

Inflation Hedging

As Bitcoin’s role as a store of value gains popularity, JPMorgan believes institutions are investing to avoid losing purchasing power. In particular, they seem to be reallocating their gold funds to invest in cryptocurrency in recent weeks.

Compared to Bitcoin, gold prices have remained stagnant despite worries about rising inflation of fiat due to Covid spending. This development would mirror Michael Saylor’s frequent claim that Bitcoin is “digital gold,” and eventually replace it.

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Lightning Network

JPMorgan also believes Bitcoin’s price has been aided by the rise of the lightning network. The lightning network is a layer 2 payment solution that allows Bitcoin’s transaction throughput to scale exponentially. El Salvador has taken advantage of the lightning network to facilitate Bitcoin payments between people and businesses across the country.

The technology is helping bitcoin serve as a medium of exchange, alongside a store of value.

Policy Assurances

Lastly, the bank names recent news from US officials as relieving for investors in the space. Federal Reserve Chairman Jerome Powell confirmed last week that he has no intention to ban cryptocurrencies. SEC Chair Gary Gensler said the same in a recent interview.

Moreover, JPMorgan made an optimistic note of how Bitcoin’s market dominance has risen against other cryptocurrencies over the week:

“The increase in the share of bitcoin is a healthy development as it is more likely to reflect institutional participation than smaller cryptocurrencies.”

BTC’s market dominance is currency above 44%, compared to just 41% in mid-September.

Can Jamie Dimon Stay Away Forever?

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Jamie Dimon– CEO of JP Morgan Chase– has repeatedly disregarded Bitcoin as an investment opportunity. However, both he and his company still seem to recognize its value and growth potential. For example, Dimon admitted last week that Bitcoin could reach over 400K USD in half a decade– but refuses to buy. Moreover, he calls people that leverage trade with Bitcoin “fools.”