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Market analysts at banking giant JPMorgan say they have identified three reasons behind Bitcoin’s latest surge.
In a note to Business Insider, the banking titan says that one of the catalysts for Bitcoin’s recent rally from the $ 40,000 to $ 55,000 level is the growing belief that it is better hedging against the inflation than gold.
“Institutional investors seem to be reverting to Bitcoin, perhaps viewing it as a better hedge against inflation than gold…
The reappearance of inflation concerns among investors has renewed interest in using Bitcoin as an inflation hedge. “
Since the start of 2021, $ 10 billion has been withdrawn from gold ETFs while $ 20 billion has been invested in BTC funds, according to the bank.
Another reason BTC has skyrocketed past the $ 1,000 billion market valuation, according to JPMorgan, relates to recent statements by SEC Chairman Gary Gensler that the United States is not following China. in terms of crypto regulation.
“Recent assurances from US policymakers that there is no intention to follow China’s measures to ban the use or exploitation of cryptocurrencies [have helped BTC]. “
Finally, JPMorgan claims that Bitcoin is on the rise due to growth in the number of users on the Lightning Network, bolstered by El Salvador’s adoption of BTC as legal tender. The Lightning Network is a layer 2 payment protocol built on blockchains such as Bitcoin that increases transaction speeds.
Salvadoran President Nayib Bukele says 2.1 million Salvadorans using the state-sponsored Chivo crypto wallet just three weeks after its launch.
BTC was trading $ 55,406 at the time of writing, according to CoinGecko.
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Featured Image: Shutterstock / GrandeDuc
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