Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The banking giant said that Bitcoin is smartly consolidating its strength against the yellow metal and emerging as a potential alternative.
Bitcoin vs Gold has always been the topic of hot discussion among investors and this time banking giant JPMorgan has jumped in. In its recent report, JPMorgan that the Grayscale Bitcoin Trust has attracted more investment over Gold ETFs for the month of October.
"What makes the October flow trajectory for the @Grayscale #Bitcoin Trust even more impressive is its contrast with the equivalent flow trajectory for #gold ETFs, which overall saw modest outflows since mid-October…" via @jpmorgan pic.twitter.com/NQGZTIpZJu
— Sonnenshein (@Sonnenshein) November 7, 2020
Grayscale is a digital asset manager providing crypto investment vehicles to institutional investors. The Grayscale Bitcoin Trust (GBTC) is one of the largest BTC funds with over $6 billion worth of assets under management. The GBTC has registered massive institutional inflow over the last few months.
In its report, JPMorgan analysts explained how the Grayscale Bitcoin Trust remained the preferred choice for institutional players in comparison to the Gold ETFs. The report noted:
“This contrast lends support to the idea that some investors that previously invested in Gold ETFs such as family offices, may be looking at Bitcoin as an alternative to gold.”
The JPMorgan analysts further mentioned that “as we had highlighted in our previous [report] of October 23rd, 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.”
Bitcoin Beats Gold as a Potential Inflation Hedge
Over the last few months, Bitcoin has overtaken the yellow metal when it comes to delivering higher returns. The recent bull run in the BTC price has further widened the gap between the two assets.
A number of market analysts have also turned in favor of Bitcoin during recent times. Billion Wall Street investor Paul Tudor Jones recently stated that Bitcoin is the best inflation trade in the world. He added:
“The reason I recommended Bitcoin is because it was one of the menu of inflation trades, like gold, like TIPS breakevens, like copper, like being long yield curve and I came to the conclusion that Bitcoin was going to be the best inflation trade.”
Big companies have already started pouring massive sums of money into BTC. MicroStrategy invested nearly $425 million of its extra cash into Bitcoin. However, this investment has already appreciated over 30% as of now. Similarly, Square Inc backed by Twitter CEO Jack Dorsey invested 1% of their reserve cash in Bitcoin.
Currently, Bitcoin valuations have already surpassed some of the big companies in the market. Veteran investors Bill Miller told CNBC that big banks and financial organizations will soon have exposure to Bitcoin. Thus, it is very much likely that Bitcoin will continue to attract more money in the coming months.
At press time, Bitcoin (BTC) is trading at a price of $15,453 with a market cap of $286 billion.