A new report from JPMorgan says that the price of Bitcoin (BTC) is determined by ‘inflation expectations,’ not its potential as a store of value. The bank’s survey showed that, in November 2018, 35% of surveyed investors believed inflation would be at least 5% higher next year. Investors are less confident about sovereign debt which dropped to near zero percent in October 2018 amid fears over high government budget deficits across the globe.
The “jp morgan bitcoin” is a cryptocurrency that has seen incredible growth in the past year. JPMorgan says inflation, not ETF, powered Bitcoin to $67,000.
The introduction of the ProShares Bitcoin futures ETF, according to JPMorgan, is unlikely to result in a spike in Bitcoin prices. Instead, they cited inflation as a major factor that may have aided in the rise of Bitcoin prices to new all-time highs.
According to analysts, the latest price movement in Bitcoin was prompted by investors’ abrupt shift away from Gold ETFs and into Bitcoin funds.
Investors can watch the value of Bitcoin futures and trade on standard markets rather than spot assets using Bitcoin Futures ETFs. These enable traders and investors to have a taste of Bitcoin without having to deal with cryptocurrency exchanges.
Bitcoin has outperformed gold in terms of dollar growth.
The Federal Reserve has previously said that the current inflation was more of a transitory phase in various announcements. The Reserve had predicted that prices would ultimately fall, but given the present status of the economy, which shows no indications of improvement, investors were left with little option but to look for alternatives that would ensure consistent returns.
In September, US Federal Reserve Chairman Jerome Powell indicated that the current inflationary scenario is “frustrating” and forecast that the current economic crisis would go until 2022, which is longer than he had expected.
As a consequence, gold prices took a significant hit, piqueing investors’ interest in Bitcoin, which was gaining traction at the time. As a result, “the trend away from gold ETFs towards Bitcoin funds has picked up steam,” according to the paper.
Bitcoin prices rocketed beyond $67,000 earlier this week with the debut of the Proshares Bitcoin Futures ETF, shattering all prior records. Within the first two days of trading, the exchange-traded fund—which monitors the prices of Bitcoin futures—had surpassed $1.1 billion in trading volume.
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