Institutional Investors Favor Bitcoin Over Gold, Says JPMorgan

“Institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold,” JPMorgan said, adding that the prior trend of money flowing out of gold and into bitcoin has reemerged in recent weeks.

Bitcoin’s price jumped above $55,000 6 October, as the asset’s market capitalization pushed above a $1 trillion. U.S. banking giant JPMorgan issued a note saying that a range of factors may be fueling the rally, including institutional investor appetite, assurances that the U.S. won’t ban BTC, and the recent rise of the Lightning Network, according to a Markets Insider report.

According to the JPMorgan note:

“The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge. Institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold.”

Previous trend of institutional money flowing out of gold and into bitcoin has reemerged in recent weeks, per the report, said the banking giant. It seems like Bitcoin is seen as a better store of value than gold among big investors, which has encouraged an increased flow of money into BTC.

JPMorgan also shared two other factors that might have been driving the bitcoin price.

Recent comments by the U.S. Federal Reserve chair Jerome Powell have also encouraged investors to jump in on BTC. Powell said that U.S. is not going to follow China, and that there is no intention to ban bitcoin in the country.

“The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption” have also helped grow confidence in the Bitcoin network and its ability to scale, JPMorgan said.