JPMorgan strategists say that interest in the newly launching BITO Bitcoin ETF could cool after a week or so.
Bitcoin (BTC) broke its all-time high price level following the launch of ProShares’ Bitcoin Strategy exchange-traded fund (ETF), BITO, on Tuesday, but JPMorgan Chase strategists consider the key driver behind the price jump is investor concern over inflation.
The BITO launch, which saw the highest-ever first-day natural volume for an ETF, is “unlikely to set off a new section of significantly extra fresh capital entering Bitcoin,” JPMorgan strategists stated in a note.
Instead, JPMorgan believes that as gold failed to reply to concerns over rising price pressures in the last couple of weeks, Bitcoin’s renewed function as a greater hedge towards inflation in the eyes of traders is the primary cause for the present bull run. The group highlighted that the shift away from gold ETFs into Bitcoin funds has been gathering pace since September and “helps a bullish outlook for Bitcoin into year-end.”
The JPMorgan strategists exemplified the waning curiosity after the primary week following the launch of the Function Bitcoin ETF (BTCC) in Canada, claiming that the initial hype surrounding BITO could also fade after a week.
As the primary Bitcoin futures-linked ETF in the US, ProShares’ Bitcoin Strategy ETF began trading on the New York Stock Exchange on Tuesday at a gap value of $40 per share. It allows investors to have direct exposure to cryptocurrency futures in a regulated market.
JPMorgan’s comments echo others in conventional finance. Billionaire investor Carl Icahn praised Bitcoin as an amazing hedge towards inflation as the next market crisis looms on the horizon.
Bill Winters, CEO of British bank Standard Chartered, not too long ago noted the passing of an extended period of low inflation, including that “it’s completely affordable for people to want an alternative to fiat currency.”