Strategists at financial institution JPMorgan Chase & Co. argued that the reason for the record BTC price is not the launch of the ETF ProShares Bitcoin Strategy. Instead, concerns about rising inflation made the digital asset an attractive investment option, leading to its recent rally.
Gold failed, BTC prevailed
The moment, which many in the cryptocurrency community had been waiting for, finally came on October 19 when the Bitcoin-backed ETF ProShares, named BITO, began trading on the New York Stock Exchange. It became the first product of its type approved in the United States.
During the first day of its launch, it generated huge trading volumes and even became the second most traded fund of all time. Soon after, BTC’s USD value headed straight north to a new all-time high at around $ 67,000.
Yet, according to JPMorgan strategists, including chief executive Nikolaos Panigirtzoglou, another factor has driven bitcoin to this milestone. Experts said the cryptocurrency had replaced gold as a hedge against inflation in recent months, which had propelled the price north:
“On its own, the launch of BITO is unlikely to trigger a new phase of entry of much fresher capital into bitcoin. Instead, we believe the perception of bitcoin as a better hedge against inflation than gold is the main reason for the current rally, triggering a shift from gold ETFs to Bitcoin funds since September. “
The JPMorgan team noted that the past two weeks had not been so successful for the precious metal. Looking at a broader time frame, bitcoin ETFs have significantly outperformed gold, as strategists revealed:
“This change in flow remains intact, supporting a bullish outlook for Bitcoin through the end of the year.”
Bitcoin Fund vs. Gold ETF flows: Source: JPMorgan
Can BTC now change the position of the Big Boss?
Jamie Dimon – CEO of JPMorgan – is among the most prominent critics of the leading digital asset. Still, it seems he has started to let go.
It all started in 2017 when the top executive called bitcoin a “fraud”. Dimon didn’t stop there and warned that “it’s worse than tulip bulbs. It will not end well. Someone is going to be killed. Soon after, however, he regretted making the comment and his financial institution became much more tolerant of BTC.
Last year, Dimon again weighed in on the issue. This time he was gentler in his comments saying that bitcoin is not his “cup of tea” and that there is no personal interest.
A few days ago, the CEO returned to its negative phase, calling BTC “worthless”. Nonetheless, he acknowledged that most of JPMorgan’s clients did not share his opinion and showed a growing demand for digital asset services.
With BTC setting a new all-time high, the crypto community has yet to find out whether Dimon will maintain its hostile stance on the matter or rather soften it up a bit and allow more offers to its bitcoin hungry customers.
Featured Image Courtesy of ThinkRemote
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