The new rise in the price of Bitcoin is attributed by JPMorgan to institutional investors who are in search of a hedge against inflation. Bitcoin surpassed the $50,000 resistance level and grew back to having a market cap of $1 trillion.
“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.”
Not only institutions are turning their attention towards Bitcoin again – for example, Shark Tank’s Kevin O’Leary also revealed that crypto has a larger share in his portfolio than gold.
JPMorgan believes that the current rally is influenced by two factors:
“The recent assurances by US policy makers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies. The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s Bitcoin adoption.”