Posted 5 months ago | by @devadmin
JP Morgan analysts recently published a brief report acknowledging Grayscale trends involving Bitcoin, stating the leading digital asset was acting as an “alternative to gold.”
The analysts wrote that Grayscale’s October data, regarding its Grayscale Bitcoin Trust, suggests that BTC may be increasingly acting as an alternative to gold. Gold has long been recognized as the traditional hedge against inflation, though Bitcoin may be gaining steam according to JP Morgan.
Michael Sonnenshein, shared the report on Twitter, noting that an influx flood of money was going into Bitcoin. While gold was dissipating and Bitcoin was instead replacing it eating at gold’s ETFs. In September of this year Bloomberg reported that Grayscale had outperformed 97% of U.S. ETFs.
"What makes the October flow trajectory for the @Grayscale #Bitcoin Trust even more impressive is its contrast with the equivalent flow trajectory for #gold ETFs, which overall saw modest outflows since mid-October…" via @jpmorgan pic.twitter.com/NQGZTIpZJu
— Michael Sonnenshein (@Sonnenshein) November 7, 2020
“The Bitcoin trust from Grayscale Investments LLC, ticker GBTC, has attracted $2.37 billion since December 2017, including $1.59 billion in 2020. That’s better than 97% of ETFs currently listed in the U.S., according to Bloomberg Intelligence.”
The new JP Morgan report states that this narrative is being driven by comments from prominent investors and analysts stating Bitcoin is a hedge against inflation.
“As we had highlighted in our previous [report] of [Oct. 23], the potential long-term upside for bitcoin is considerable if it competes more intensely with gold as an ‘alternative’ currency given that the market cap of bitcoin would have to rise 10 times from here to match the total private sector investment in gold via ETFs or bars and coins,” the authors write.
It’s important to note that, JP Morgan recently mentioned, MicroStrategy who bought $425 million worth of Bitcoin over two months, and Square who acquired $50 million worth of BTC, in another report last month. In that report, JP Morgan praised Bitcoin stating it has “a lot of potential” while stating that Square and Microstrategy’s investments were a “vote of strong confidence”, JP Morgan analysts said in their previous report.
JP Morgan has for years flip-flopped on Bitcoin, with its founder Jamie Dimon at one point saying it was worthless on par with Warren Buffett’s comments about the cryptocurrency. In fact, JPMorgan chief executive Jamie Dimon called bitcoin a “fraud” in September 2017. and even made comments about JP Morgan employees owning any would be fired.
Although, around the same time JP Morgan’s head of digital treasury services Umar Farooq said the following comment.
“We are supportive of cryptocurrencies as long as they are properly controlled and regulated,” Farooq, JP Morgan’s head of digital treasury services and blockchain, said back in 2017.
As Forbes reports, the company led by Dimon, turned around its message about cryptocurrency and began diving into the industry. Earlier this year, the bank added its first crypto exchange customers and Dimon reportedly hosted secret meetings with the boss of major bitcoin and crypto exchange, Coinbase.
That’s not all though, around the same time, JP Morgan approved two bitcoin exchanges’ accounts for use with its bank, Gemini and Coinbase, The Wall Street Journal reported. Several analysts at JPMorgan are hopeful that numerous payment companies will enable their clients to buy BTC via their apps, akin to Square’s Cash App. This is likely alluding to the highly speculated confirmed rumor that Paypal is getting ready to jump into the digital currency space within the next couple months.
Fidelity another investment bank has bet on a “wave” of people investing in Bitcoin. Fidelity also added that Bitcoin could see its market cap surge to $2 trillion if certain conditions are met. As Bitboy Crypto reported, the Fidelity report indicated that institutional interest could increase Bitcoin’s market capitalization by up to $1.3 trillion by capturing just 10% of investments from the alternative investments and fixed income market valued at $13.4 trillion.
Bitcoin is currently trading at [FIAT: $15,283.15] DOWN -1.5% in the last 24 hours according to Coingecko at the time of this report.