Why did American investment banking company JP Morgan say Bitcoin is better than Gold?

Bitcoin is taking away its attractiveness from gold. In a note to investors, US-based investment banking company JP Morgan said that bitcoin is a better hedge against inflation than gold. Bitcoin fans have long tried to claim that the cryptocurrency promises better and faster returns than gold. Many people like it as value storage. Both of these characteristics are usually associated with gold. However, critics say that bitcoin is extremely volatile and there is no guarantee that it will always move upwards on the growth graph.

Nevertheless, the price of bitcoin has crossed the $50,000 mark (about Rs 37.56 lakh) for the third time this year. However, this trend also shows that the faster the digital coin can rise, the faster it can fall. But at the same time, it cannot be denied that investing in bitcoin can prove to be beneficial somewhere in the end.

The note from JPMorgan reportedly read, “Institutional investors are turning to bitcoin, perhaps seeing it as a better hedge against inflation than gold.” Commenting on the company’s observation, Fortune magazine said that the note is “no surprise” to those who have been following bitcoin’s performance this year.

This year bitcoin has seen huge volatility. In February, it crossed the $50,000 mark for the first time and then reached its all-time high of around $64,000 (approximately Rs 48.08 lakh) in April. The massive cryptocurrency market crash occurred in May and the bull run subsided. At that point bitcoin lost all its achievements of the year. The crash was so severe that it even fell below the trade value of $30,000 (approximately Rs 22.53 lakh).

It took some time for the cryptocurrency to break out of that recession and by July it was again trading around $40,000 (approximately Rs 30.05 lakh). In August, bitcoin again crossed the $50,000 level. A month later it hit the milestone for the third time. Bitcoin was trading at Rs 44 lakh till 11 am (IST) on Monday, October 11.

JP Morgan believes that this third rally has arisen due to the concern of investors to hedge against inflation. They are trying to use bitcoin as a hedge against inflation.