JPMorgan Highlights BTC as Better Inflation Hedge Than Gold

A jump in institutional inflows is reportedly one of the reasons for the Bitcoin price rising over 35% to a multi-week high of $55,348.

According to US investment bank JPMorgan, institutional investors are increasingly buying Bitcoin (BTC), preferring the benchmark cryptocurrency over gold as a hedge against inflation.

Analysts at the bank see the increased inflows into BTC funds as one of the reasons for the rise in the price of Bitcoin from September lows at $ 40,000 to a peak of $ 55,000 this week.

In a research note released Thursday, JPMorgan also pointed out that the 35% Bitcoin rally received some upward momentum from positive news from U.S. regulators and a surge in Lightning Network usage as El Salvador’s citizens continue to recognize Bitcoin as legal tender.

On the regulatory front, Fed Chairman Jerome Powell and U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler recently assured that the U.S. will not ban cryptocurrencies, as it does in China. The news triggered an upward reaction in the market and caused Bitcoin to significantly exceed the $50,000 mark.

Investors prefer BTC over Gold as a safe haven

According to JPMorgan’s investor note, there is a growing interest in Bitcoin among institutional investors, with many trying to abandon positions in gold in favor of cryptocurrency.

“Institutional investors seem to be returning to Bitcoin because they may think it provides better inflation protection than gold”according to analysts.

The report also points to a turnaround with more money flowing into Bitcoin than gold in recent months.

JPMorgan told investors in the note that over $10 billion flowed out of gold ETFs in 2021, while Bitcoin recorded an inflow of over $20 billion. According to JPMorgan, this trend is an indication of increased institutional investment in Bitcoin, which has favored the price development of the cryptocurrency in recent days.

At the time of writing this article, the Bitcoin price is back above $54,500 after hitting the $53,000 mark again on Wednesday amid negative news about the leading stablecoin Tether (USDT). Since October historic on a positive note for Bitcoin, prices could break above $55,000 in the next few days, targeting a technical resistance in the range of $58,000 to $60,000.

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