According to JPMorgan analysts, the Bitcoin price race happens due to high inflation rates and not futures EFT. They think that BTC is a better hedge than gold.
The cryptocurrency price craze got unleashed right after Bitcoin reached a new price record, above $ 66,000, just a day after the first exchange-traded fund (ETF) of Bitcoin futures got released.
The strategists leading the investment bank JPMorgan Chase & Co commented on something that the public opinion did not expect from such a company.
The entity assured that the new high peak is happened due to high inflation rates rather than the launch of the first futures ETF that drives the cryptocurrency to all-time highs.
Bitcoin and not Gold Against Inflation
The news agency added that growing concerns about inflation restored investors’ interests in assets that can act as hedges; Bitcoin got included in the list.
The media outlets highlighted that gold has not responded, in recent weeks, to growing concerns about mounting cost pressures. The shift from gold ETFs to Bitcoin funds has experienced a considerable acceleration.
Strategists at JPMorgan said that this change in flow remains intact, supporting a bullish outlook for Bitcoin through the end of the year.
These strategists pointed out that, with the $ 56 billion SPDR Gold Shares gold-based ETF, ticker GLD, which is on track to see its fourth consecutive month of exits that, so far, total more than $ 3.6 billion in that span, according to data gathered by Bloomberg.
Won’t the ETF fanaticism last long?
Although Bitcoin investors already have a lot of investment options, JPMorgan said, that at the same time, he believes this is not the great price driver.
The bank’s strategists recalled that the launch of the proposal for Bitcoin ETF (BTCC ticker) in Canada had a good reception but then slowly started to decline. The first wave of hype with BITO would tend to fade after a week.
ProShares’s BITO debuted Tuesday as the second-most-traded fund on record. The fund continued its hot streak on its second day live. BITO registered a trading volume of more than 29 million shares, representing more than USD 1.2 billion.
The fund now has assets of $ 1.1 billion, according to the company. That’s the fastest an ETF has reached the $ 1 billion mark, according to Bloomberg.
Bitcoin is frequently referred to as “digital gold” to highlight its advantages as a store of value.
Although institutional investment funds have traditionally favored the precious metal as a hedge against inflation; The situation is now showing several signs of change.
The Bank of New York Mellon, the oldest in the United States of America, led a retrospective study at the end of April of one of its funds, which had had exposure to gold. The bank’s analysis concluded that “weak gold prices” hampered the fund’s performance.
By: Jenson Nuñez
