JPMorgan: Institutional Investors Embrace Crypto as Bitcoin Pushes Higher

Bitcoin price surged above $55,000 today, the highest rate since May. The market continues to have a deep divergence while a halt signal appears quickly.

The rebound of the world’s biggest cryptocurrency, on the other hand, quashes institutional statements made by Nikolaos Panigirtzoglou in June.

New Era

JPMorgan’s global market strategist shared his views on the Bitcoin direction, forecasting that the value of bitcoin in the medium term may drop significantly and become unattractive to potential investors.

Previously, JPMorgan had raised the possibility that bitcoin could hit the $140,000 mark if a balance in volatility or distribution between bitcoin and gold occurred. However, in Yune, JPMorgan said that the cryptocurrency was unlikely to fit the allocation and volatility pattern of gold in the near future.

On Wednesday, Bitcoin price continued to increase rapidly and surpassed the $55,000 mark, bringing the market capitalization to exceed $1,000 trillion.

There is still some debate as to whether it was a coincidence or a rotation out of gold into Bitcoin. But according to the latest statement from Nikolaos, the motive behind Wednesday’s rally is the participation of institutional buyers also known as bitcoin whales.

“The increase in the share of bitcoin is a healthy development as it is more likely to reflect institutional participation than smaller cryptocurrencies.”

The assumptions of the expert forecaster clearly failed when it came to the institutional preference for Bitcoin vs Ethereum.

Explaining Bitcoin resurgence and unexpected behavior of institutional investors, Nikolaos focuses on the most important factor that has driven the price to its new high mark: inflation.

Currently, governments are starting to implement large-scale fiscal stimulus programs, which analysts say could lead to a spike in inflation. This digital currency is the key driving force to pull the cryptocurrency market price above $1,000 trillion for the first time in history.

At the same time, institutional investors are very hopeful that the Bitcoin currency will act as a hedge against inflation. This point was once mentioned in JPMorgan’s report. The bank outlined an extremely bold long-term price target for digital currency.

China Makes a Move

The other two major factors that have an impact on Bitcoin recovery are US policymakers’ responses towards China’s cryptocurrency ban and Lightning Network’s emergence. Unlike China, the approach of the U.S. is different and the country has no intention to prohibit the use or mining of cryptocurrencies.

As part of Lightning Network, “the recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption” also contributes to the growth of credibility in the Bitcoin network and its potential scalability.
In September, JPMorgan Bank noted that institutions were favoring Ethereum over Bitcoin.

According to the major bank, at the time being, Bitcoin is more of a commodity than a currency, competing with gold as a store of value, whilst the Ethereum network is regarded as the backbone of the crypto economy and serves as a means of transaction.

Despite allowing customers to invest in Bitcoin funds, the major bank believes that Ethereum will be more valuable than Bitcoin in the long run.

JPMorgan strategist previously pointed out an in-depth assessment between Ethereum and Bitcoin, highlighting that demand for Bitcoin was getting low while Ethereum likely took the lead. The recent hype of DeFi and NFT as well as a greater number of transactions on ETH are proofs that support his justification.

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