According to JPMorgan, big institutional investors, such as banks and hedge funds, are beginning to see Bitcoin as a better and better instrument for combating inflation.
The first cryptocurrency, whose market capitalization surpassed $1 trillion this week, is not inflationary because its supply is capped at 21 million units. On the other hand, governments can produce fiat currency at will, increasing inflationary pressure by increasing the money supply.
In a statement to clients, the bank’s analysts said that institutional investors appear to be returning to Bitcoin, maybe considering it as a better inflation hedge than gold, citing the cryptocurrency’s recent climb from below $40,000 to more than $55,000.
Skeptics continue to exist
On the other hand, JPMorgan Chase CEO Jamie Dimon is a vocal opponent who recently compared bitcoin to “fool’s gold,” citing China’s recent ban on retail cryptocurrency trading. He stated,”
“It’s got no intrinsic value, and regulators are going to regulate the hell out of it… If people are using it for tax avoidance and sex trafficking and ransomware, it’s going to be regulated, whether you like it or not.”