Following the release of ProShares’ Bitcoin Strategy exchange-traded fund (BITO) on Tuesday, Bitcoin (BTC) broke its all-time high price level. But JPMorgan Chase specialists believe the driving factor behind the price spike is shareholder concern over inflation. And that interest in the newly launched BITO Bitcoin ETF could cool within a week or less.
According to JPMorgan strategists, the BITO debut, which saw the largest ever first-day natural volume for an ETF, is “unlikely to start a new phase of significantly more fresh capital entering Bitcoin.”
Bitcoin’s resurgence as a stronger inflation hedge in the perspective of investors
However, JPMorgan suggests that the current uptrend is the result of Bitcoin’s revived role as a superior hedge against inflation in the eyes of investors. As gold has failed to react to concerns about rising cost pressures in recent weeks. The team noted that the shift away from gold ETFs and toward Bitcoin funds has been gaining traction since September. And that this “facilitates an optimistic forecast for Bitcoin until the year-end.”
JPMorgan experts demonstrated diminishing interest after the introduction of the Purpose Bitcoin ETF (BTCC) in Canada, arguing that the early excitement surrounding BITO might likewise fade within a week.
ProShares’ Bitcoin Strategy ETF began trading on the New York Stock Exchange on Oct. 19 at an initial price of $40 per share, making it the first Bitcoin futures-linked ETF in the United States. In a regulated market, it allows investors to have significant exposure to cryptocurrency futures.
“It’s absolutely fair for citizens to desire a fiat money alternative”
JPMorgan’s remarks are similar to those made by others in conventional finance. As the next market crisis approaches, billionaire investor Carl Icahn commended Bitcoin as a superb inflation hedge.
Bill Winters, the CEO of the British bank Standard Chartered, recently stated that “it’s completely fair for people to demand an alternative to fiat currency,” referring to the end of a lengthy period of low inflation.