Bitcoin prices jumped by over 35% this week. Despite not so crypto-friendly moves by China, Bitcoin has demonstrated resilience. Banking and investment giant, JP Morgan has said that the Bitcoin rally is a result of institutional investors actively investing in the leading cryptocurrency.
In a note to investor clients, JP Morgan said that “The re-emergence of inflation concerns among investors has renewed interest in the usage of Bitcoin as an inflation hedge.” The note also explained that investors are preferring BTC as a hedge against inflation over gold.
Analysts noted that “Institutional investors appear to be returning to Bitcoin perhaps seeing it as a better inflation hedge than gold”
Despite China’s ban on cryptocurrencies, what has been driving the investor sentiments is the US lawmakers confirming that they are not going to ban crypto as China did. In fact, there are many who are actively pursuing a more crypto-friendly regulatory framework in the US.
“The recent assurances by US policymakers that there is no intention to follow China’s steps towards banning the usage or mining of cryptocurrencies,” JP Morgan analysts opined.
“The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s Bitcoin adoption.”
Apart from Bitcoin, other altcoins including Ethereum and Solana have also demonstrated a strong upward trend. However, experts have mixed opinions over the market movement. While many are predicting a sustained bull run, others are not so positive about the leading token prices holding their current position by the next weekend.