Bitcoin’s local rally this week was fueled by institutional interest, the rise in popularity of the Lightning Network, and assurances from US authorities that they have no intention of banning cryptocurrencies. This was stated by JPMorgan analysts in a note to clients, according to Markets Insider.
Over the past week, the price of bitcoin has risen more than 26%, according to CoinGecko. On Wednesday, October 6, quotes crossed the $ 55,000 mark, and on October 8, they tested the $ 56,000 level. At the time of writing, the asset is trading near $ 55,400.
According to the specialists of the financial holding company, institutional investors are increasingly using bitcoin as a hedging tool for inflation. This is also indicated by gold quotes, which, despite growing fears about the depreciation of money, in the last year have remained in a narrow range of $ 1700- $ 1900.
“Institutionals seem to be returning to bitcoin, arguably considering it the best inflation hedge against gold,” the note said.
Analysts also added that in recent weeks there has been a “previous” trend of capital outflow from the precious metal to the cryptocurrency. According to them, since the beginning of the year from gold-oriented ETF withdrew more than $ 10 billion. At the same time, Bitcoin-related funds received more than $ 20 billion.
JPMorgan noted that the legalization of bitcoin in El Salvador contributed to the growth of the Lightning Network. In September alone, network capacity increased by 25%, while the number of nodes and channels increased by 3.4% and 5.8%, respectively.
The popularity of the solution was also influenced by the integration of Bitcoin donations from Twitter.
Assurances from American politicians that they have no intention of following the path chosen by China to completely ban cryptocurrencies also encouraged investors, JPMorgan added.
Chapter FRS Jerome Powell said at the end of September that the agency does not plan to block digital assets, but considers it necessary to include some of them in the legal framework.
In October, a similar statement was made by the head of SEC Gary Gensler. He stressed that most cryptocurrencies correspond to the status of investment contracts, and stablecoins pose a threat to financial stability.
Earlier, JPMorgan analysts said that institutions have switched Ethereum futures from similar instruments based on the first cryptocurrency.
We will remind, the head of the financial holding Jamie Dimon allowed the growth of bitcoin tenfold, but refused to buy it.
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