Bitcoin’s record-breaking rally spurred by inflation, JPMorgan says

·2 min read

Bitcoin’s run upward this past month, culminating in a new record price of nearly $67,000, was a result of high inflation, JPMorgan Chase has concluded.

The record, which broke a previous high in April, came on Wednesday and coincided with the launch of the first bitcoin-linked exchange-traded fund. The ProShares Bitcoin Strategy ETF tracks contracts speculating about the future price of Bitcoin rather than being tethered to the actual value of Bitcoin.

While some tied the launch of the Bitcoin ETF with the cryptocurrency’s record high, JPMorgan strategists said that it is “unlikely to trigger a new phase of significantly more fresh capital entering Bitcoin” and that the real culprit for Bitcoin’s recent gains is inflation.


“Instead, we believe the perception of Bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into Bitcoin funds since September,” the strategists said.

Consumer prices rose 5.4% for the year ending September, according to a report by the Department of Labor, the highest pace of inflation since 2008. Inflation also recently hit the highest rate in 30 years in the gauge favored by the Federal Reserve, which is still asserting that the higher costs will only be temporary and that inflation will settle back down in the coming months.

The price increases are causing investors to flock toward assets that can act as a hedge for inflation. People are turning to cryptocurrency instead of gold this year, which has pushed its price upward.

Billionaire investor Paul Tudor Jones said this week that cryptocurrency is his “preferred” inflation hedge over gold right now.

“Clearly, there’s a place for crypto. Clearly, it’s winning the race against gold at the moment,” Jones, who is a Bitcoin enthusiast, told CNBC.


Gold has shed 8% of its value over the past year. Bitcoin has posted meteoric gains of more than 415% during that same period of time.

Washington Examiner Videos

Tags: News, Bitcoin, Inflation, Investment, Cryptocurrency

Original Author: Zachary Halaschak

Original Location: Bitcoin’s record-breaking rally spurred by inflation, JPMorgan says

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting