Bitcoin Price Surge to ATH is Driven More by Inflation Than BITO Launch – JPMorgan

The surge in the price of premier digital currency Bitcoin (BTC) pushed it to an All-Time High (ATH) of $66,930.39 is perceivably driven by a number of factors, chief of which has been identified by JPMorgan Strategists. 

Unlike the growing sentiments that surrounded the launch of America’s first Bitcoin-linked ETF product, the ProShares Bitcoin Strategy exchange-traded fund (BITO), the strategists led by Nikolaos Panigirtzoglou said the status of BTC as a hedge against inflation is more likely responsible for driving the surging growth of the cryptocurrency as we have seen in the past days.

“By itself, the launch of BITO is unlikely to trigger a new phase of significantly more fresh capital entering Bitcoin,” the strategists wrote. “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 analysts identified a trend in which there is a growing outflow in the Gold-backed ETFs and increased exposure to equities tracking Bitcoin both in the United States and in other markets. “This flow shift remains intact supporting a bullish outlook for Bitcoin into year-end,” the strategists said. 

Bitcoin has lost its steam in the past 24 hours and is currently trading at $64,884.63, atop a slight gain of 0.89% at the time of writing. 

BITO Launch Not Enough to Sustain Bitcoin ATH

The launch of BITO marked a historic milestone in the history of Exchange Traded Funds, as the investment product came off as the second most traded ETF in history on it’s debut. The ETF added an extra 29 million shares the next day of trading and its upward momentum has pushed it to a cap of $1.1 billion, an unusual growth push with ETFs in general.

Despite this growth and publicity, the JPMorgan Strategists noted that the current hype surrounding the launch of BITO is likely to clear off in the coming week, making the current hype unsustainable in helping to sustain the ATH record of Bitcoin.

“The initial hype with BITO could fade after a week,” they said

There are many projections for the price of Bitcoin to hit valuations of over $100,000 before year-end. There are more BTC linked ETFs incoming and while these are going to help fuel the growth of the digital currency in a good way, the combined fundamentals surrounding the role of the digital currency as a hedge against inflation will usher in the sustainability needed.