The flagship digital asset, Bitcoin, in the last seven days has witnessed one of its best times in recent weeks with its value touching as high as $55,000 during the bull run.
While many analysts are yet to place a finger on what triggered this run, a research note from a leading traditional bank, JPMorgan, has revealed that institutional investors are returning to the asset.
JPMorgan lists why Bitcoin is green
According to JPMorgan, the influx of this new wave of institutional investors in BTC is an attempt to hedge against inflation. The bank continued that while investors might have chosen gold in the past, their perception nowadays is that Bitcoin is a better inflation hedge.
Institutional investors appear to be returning to bitcoin perhaps seeing it as a better inflation hedge than gold.
JPMorgan continued that in this year alone, over $10 billion has been withdrawn from gold ETFs whereas Bitcoin funds have seen an inflow of over $20 billion within the same period.
This level of inflow has had a positive impact on the market share of BTC amongst other crypto assets. “The increase in the share of bitcoin is a healthy development as it is more likely to reflect institutional participation than smaller cryptocurrencies.”
Another reason the bank gave for the green run was the assurances US authorities had given the crypto community about its intention not to ban the industry. There were heightened fears within the crypto world that the United States could also tow the China path by banning crypto transactions too.
However, the chairman of the Securities and Exchange Commission, Gary Gensler, in a recent interview declared that the country was not going to ban cryptocurrencies.
Lastly, the bank opined that the Bitcoin bull run was also pushed by “the recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption.”
Ad: Up to 20x margin on FTX.
Get an edge on the cryptoasset market
Access more crypto insights and context in every article as a paid member of CryptoSlate Edge.
Like what you see? Subscribe for updates.