27 October 2021
Finally, Bitcoin has crossed the $50,000 resistance level and regained a $1-trillion market capitalization. According to JPMorgan, the rising interest from institutional investors as a hedge against Inflation played a significant role in the latest BTC rally.
“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 with gold. However, Institutions aren’t alone here. Earlier this week, Shark Tank star Kevin O’Leary revealed that Crypto now accounts for a larger allocation in his portfolio than gold.
The recent report from JPMorgan also provides two major factors it believes are behind the current rally.
- Recent assurances by US policymakers of not following China’s steps of banning the usage or mining of Cryptocurrencies.
- Rise of Lightning Network and 2nd layer payments solutions due to El Salvador’s Bitcoin adoption.
Although some divisions of JPMorgan highlight a growing interest in Crypto assets and Blockchain initiatives, CEO Jamie Dimon stated in an interview that he remains a skeptic of BTC and even compared it to “a little bit of fool’s gold.”
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.