According to a report from JPMorgan, institutional investors have recently turned to Bitcoin rather than gold, and this could lead to a 10x increase in Bitcoin.
JPMorgan Report: The GrayScale Bitcoin Trust is outperforming gold exchange-traded funds
JPMorgan analysts have listed several reasons why Bitcoin has soared in value over the past month, and at the same time, drew serious attention to itself. Those include large companies buying BTC in bulk, PayPal allowing its customers to buy and sell some digital assets, and the massive growth of Grayscale’s Bitcoin Trust.
“The ascend of Grayscale Bitcoin Trust suggests that Bitcoin demand is not only driven by the younger cohorts of retail investors, i.e., millennials, but also institutional investors such as family offices and asset managers. These institutional investors appear to be the biggest in the Grayscale Bitcoin Trust, perhaps reflecting their preference to invest in Bitcoin in fund format.”
The Nov. analysis wrote in the Nov. 6 reports:
“This contract lends support to the idea that some investors that previously invested in gold ETFs such as family offices, maybe looking at Bitcoin as an alternative to gold.”
The climb of the Grayscale Bitcoin Trust indicates it’s not just millennials driving demand for bitcoin, but institutional investors like family offices and asset managers.
The analysts continued:
“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.”
However, this week’s sharp spike in prices appears to have taken bitcoin close to overbought levels, which could trigger a sell-off.
Accordingly, some investors, such as home offices, have allocated more money to Bitcoin than gold in recent months. Analysts from the giant multinational investment bank also noted that comparing the two assets could drive a massive rise in BTC’s price.
The article emphasizes that:
“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.”
This contrast supports the story that some investors who previously allocated capital to gold ETFs, such as home offices, established Bitcoin as an alternative to gold. This could lead to a significant price increase for Bitcoin.
You can see the Bitcoin price here.
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