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- Bitcoin has been on the rise since late September. From the lowest price of $ 40,000, it has reached about $ 50,000.
- According to JP Morgan, this growth is due to three factors. First, investors want it to cover risk. Second, regulators have ensured that they will not ban cryptography. And third, the number of users on the Lightning network has increased.
Bitcoin owes its almost 38% increase due to three main factors. This is based on the analysis of banking giant JP Morgan.
The premier digital currency has been on the rise since late September. Its price has risen from a low of about $ 40,000 to its current high of $ 55,000. This increase represents a 37.5% jump and has enabled it to overcome significant technical resistance.
The rise in BTC wealth has pushed its market value above $ 1 trillion. And JP Morgan divided growth into three factors in a press release Thursday.
Bitcoin is a hedge better than gold
The bank says the most important reason is the growing belief in the protective capabilities of BTCs. In its analysis, JP Morgan believes that institutional investors prefer it for riskier purposes than gold.
“Investors are upset about rising inflation,” he said. These fears, in turn, lead them to cryptography.
To guide its core point, JP Morgan provided data to compare investments in both assets. As of this year, investors have withdrawn $ 10 billion from tradable gold funds (ETFs). In contrast, they have invested twice as much in BTC funds.
Again, the price of bitcoin continues to rise while gold falls. The annual value (YTD) indicates that BTC has grown by 86%. During the same period, gold lost 7% and highlights why many prefer the former.
The SEC’s reassurance about digital currencies has pushed up the price of BTC
Another reason for this jump is the tacit approval of the Securities and Exchange Commission (SEC) of cryptographers. JP Morgan’s analysis shows that the SEC’s assurance that the cryptographic mining ban has helped push up the price of BTC.
SEC Chairman Gary Jensler has stressed that the United States will not follow China in banning cryptographic activities. The latter has made headlines for its anti-cryptography campaign. Last week, the 2021 list released negative market access.
This list shows parts of China’s economy that residents and foreigners cannot invest in.
El Salvador BTC approval has lowered its price
Finally, the Bank suggests that El Salvador played a role in the BTC uptrend. Earlier this year, the country chose the currency code as its legal tender. In addition to curbing excessive inflation, the country was looking for cryptocurrencies for financial entry.
JP Morgan insists that the country’s move has increased the number of Lightning users. This network is a Layer 2 (BC) blockchain protocol. This allows timely transactions to take place during BTC BC.
Salvador’s vice president, Buckel, claims that 2.1 million of his compatriots have accepted the BTC. They use government-sponsored Chivo wallets to trade in BTC. Using such a significant number of users secures BC and increases the value of BTC.
Other analysts attribute BTC’s rise to its flexibility in clearing China’s digital currencies. Although the currency was initially hit, its price was corrected after the migration of mining activities to encrypted secure destinations.
All indicators show that the currency will maintain its upward trend. At the time of writing, it costs $ 55,406.