Bitcoin (BTC) surpassed its previous all-time highs after the launch of ProShares’ Bitcoin Strategy exchange-traded fund (ETF), BITO, on October 19. However, JPMorgan Chase strategists think that the biggest driver behind the price spike is investor worries over inflation.
The BITO launch saw the highest-ever first-day natural volume for an ETF might not trigger a new phase of considerably fresh capital entering Bitcoin, according to a note by JPMorgan strategists. These strategists said that interest in the newly launching BITO Bitcoin ETF may cool down after almost a week.
Nonetheless, JPMorgan thinks that as gold failed to respond to worries over rising cost pressures in the past several weeks, BTC’s renewed role as a better hedge against inflation for the investors is the primary reason for the current bull run.
The team said that the move away from gold ETFs into Bitcoin funds has been gathering momentum since last month and “supports a bullish outlook for Bitcoin into year-end.”
JPMorgan strategists highlighted the dwindling interest after the first week that followed the launch of the Purpose Bitcoin ETF (BTCC) in Canada. They alleged that the original hype that is surrounding BITO may also fade after a week.
As the first Bitcoin futures-linked ETF in the US, ProShares’ Bitcoin Strategy ETF began trading on the NYSE on October 19 at an opening price of $40 per share. These shares enable investors to have direct exposure to crypto futures in a majorly regulated market.
JPMorgan’s comments reiterate others in the traditional finance space. Billionaire investor Carl Icahn said that Bitcoin is a great hedge against inflation with the next market crisis seemingly looming on the horizon.
The CEO of British bank Standard Chartered, Bill Winters, recently said that the passing of a long period of low inflation, adding that “it’s perfectly reasonable for people to want an alternative to fiat currency.”