Bitcoin is on a roll. After breaking the stiff barrier of $ 50K, the price of the main cryptocurrency seems to have taken off. With an increase of 87% so far in 2021, Bitcoin already exceeds $ 57,000. Meanwhile, gold is down 7.3% in the same period of time.
In this regard, in a note published by JPMorgan, “institutional investors seem to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.” Despite having experienced large fluctuations during the year, investors do not seem concerned.
The note comes as no surprise to those who have been tracking Bitcoin investments in 2021. In April, popular exchange Coinbase noted in its first quarter report that of the $ 335 billion in trading the company hosted that quarter, 215,000 millions of dollars came from more than 8,000 institutional investors.
Part of the motivation for these wealthy investors to invest in Bitcoin and other similar cryptocurrencies is their built-in protection against inflation. According to the JPMorgan report, “The resurgence of inflation concern among investors has renewed interest in using Bitcoin as an inflation hedge.”
Recently, some big-name investors have given their go-ahead to cryptocurrencies. Dawn Fitzpatrick, head of George Soros’s hedge fund Soros Fund Management, revealed at a Bloomberg event that the fund owns some cryptocurrencies, but “not many.”
For his part, businessman and Shark Tank star Kevin O’Leary stated this week that his cryptocurrency holdings exceeded the gold allocation in his portfolio.
JPMorgan had noted in a May report that institutional investors were trading gold for bitcoin, but still maintained that the cryptocurrency could hit $ 140,000 in the long run.
In addition, the financial entity points out as a catalyst for this rise in the price of bitcoin to the statements of important officials of the United States government, who assured that their country would not follow Chinese prohibitions on the use or mining of crypto assets and added that “The recent rise of the Lightning Network and second-layer payment solutions aided by the adoption of Bitcoin in El Salvador” was also a boost for Bitcoin.