JPMorgan: Bitcoin (BTC) Remains More Favorable Asset Over Gold for Institutional Investors
Banking giant JPMorgan has recently released a report stating that Bitcoin (BTC) is currently the more favorable asset than gold, among institutional investors. The report comes just at a time when Bitcoin price hit its new 2020-high last week moving closer to $16,000 levels.
The report goes to mention that BTC investment vehicles like the Grayscale Bitcoin Trust (GBTC) has attracted institutions and family offices over the last few months. In the report, the banking giant also explores other fundamental strengths leading to Bitcoin (BTC) price rise.
The JPMorgan analysts wrote: “This contract lends support to the idea that some investors that previously invested in gold ETFs such as family offices, may be looking at Bitcoin (BTC) as an alternative to gold”.
Besides, JPMorgan also cites other reasons for the Bitcoin (BTC) price rise and the recent sizeable purchase from big companies over the last few months. MicroStrategy has been the biggest purchaser pouring $425 million of its liquid cash reserves in Bitcoin. Later, Square Inc also invested $50 million last month, pouring 1% of its reserve assets. Stone Ridge subsidiary NYDIG also purchased $115 million worth of BTC last month.
The Grayscale Bitcoin Trust has been the biggest beneficiary of the institutional wave and is now holding more than $6 billion worth of Bitcoins. The digital asset manager has also been registering the best consecutive quarters in 2020.
Speaking about the massive inflows in the Grayscale Bitcoin Trust, JPMorgan wrote: the “ascend of Grayscale Bitcoin Trust suggests that Bitcoin demand is not only driven by the younger cohorts of retail investors, i.e., millennials, but also institutional investors such as family offices and asset managers. These institutional investors appear to be the biggest investors in the Grayscale Bitcoin Trust, perhaps reflecting their preference to invest in Bitcoin in fund format.”
Moreover, in its report in the last week of October, “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.”
One thing is very much clear that Bitcoin continues to more and more institutional interest with its recent move. Also, the rampant printing of money by the Fed and the concerns of rising inflation put Bitcoin at a more favorable position than ever before.
At press time, Bitcoin (BTC) is trading at a price of $15,545 with a market cap of $288 billion. The world’s largest cryptocurrency has appreciated over 100% year-to-date against Gold’s 30% returns.