Institutional Investors Are “Returning to Bitcoin” as Inflation Concern Reemerges, says JPMorgan

Shark Tank’s Kevin O’Leary, who was previously a bitcoin skeptic and is now turning bullish, also revealed recently that he now owns more crypto than gold for the first time.

As Bitcoin price turns bullish, so does JPMorgan about the trillion-dollar cryptocurrency.

In its latest note shared with clients, the banking agent said Bitcoin looks more and more like the new gold as a hedge against inflation.

Currently trading above $55,000, Bitcoin is up more than 89% year to date. Meanwhile, gold is down 7.3% during the same period.

While the leading cryptocurrency is seeing large fluctuations, investors aren’t bothered by it, said JPMorgan in this week’s note.

“Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.”

The bank is seeing tentative signs that the shift away from gold to Bitcoin, which was last seen in Q4 of 20220 and the beginning of 2021, has started to re-emerge in recent weeks.

“The reemergence of inflation concerns among investors has renewed interest in the usage of Bitcoin as an inflation hedge.”

According to the bank, money flows from precious metal to digital gold. Additionally, the recent rise of Bitcoin’s layer 2 payment solution Lightning Network in El Salvador is a boon for the cryptocurrency.

Moreover, the assurances from the Federal Reserve Chair Jerome Powell and the US Securities and Exchange Commission (SEC) Chairman Gary Gensler that they won’t ban Bitcoin may be fueling the rally, as per the JPMorgan report.

Crypto Is Simply Not Going Away

These bullish comments from JPMorgan come as Dawn Fitzpatrick, head of George Soros’s hedge fund, Soros Fund Management, revealed that the funds own some Bitcoin. Also, Shark Tank’s Kevin O’Leary said that his crypto holdings now outweigh gold in his portfolio this week.

“I have 5% in gold. Crypto for the first time is more than gold for me.”

“The best way to look at it, if you’re an investor, either you believe in decentralized finance and centralized finance, and you believe in Bitcoin and Ethereum and the blockchain.”

Previously a Bitcoin and crypto skeptic, O’Leary now says he aims for a 7% allocation by year-end because he's a believer.

“I put many bets out with different companies now they’re developing products in these areas, and I’m pretty comfortable with where I sit,” he said adding, he doesn't agree with zero exposure in crypto anymore.

As for the regulatory scenario surrounding the crypto industry, the 67-year-old said he doesn’t “see a situation where cryptos are going away.”

According to O’Leary, the productivity enhancements that cryptocurrencies offer along with the infrastructure of decentralized finance (DeFi) “are far too interesting for even governments.” He also doesn't believe that the US government would want to “fall behind in the development of new payment systems and services online.”

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