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Bitcoin rallies as institutions use it as inflation hedge, JP Morgan says

Published: 08:39 08 Oct 2021 BST

bitcoin

Bitcoin has rallied 13% over the past five days, reaching a market cap of US$1 trillion.

According to JP Morgan, it’s because institutional investors are investing in the cryptocurrency as a hedge to inflation.

READ: US markets regulator gives green light to 'nearest thing to a US bitcoin ETF'

"The re-emergence of inflation concerns among investors has renewed interest in the usage of Bitcoin as an inflation hedge," analysts were reported as saying by Cointelegraph.

"Institutional investors appear to be returning to Bitcoin perhaps seeing it as a better inflation hedge than gold."

The investment bank said the market has been reassured by the US stating it won’t follow China’s steps in banning the use or mining of Bitcoin.

“Bitcoin has generated some incredible momentum this month, surviving an assault on US$40,000 before tearing higher and bursting through major technical resistance along the way,” said Craig Erlam at OANDA.

“We saw US$50,000 fall with relative ease, similar to US$52,500 and suddenly it seems a question of when we'll see new highs, not if. We're seeing a modest pullback today but momentum remains very much with the rally. We may not have to wait long to see US$60,000.”

The crypto rose 1% on Friday and was changing hands at US$54,478.

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