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According to JPMorgan strategists, interest in the newly launched BITO Bitcoin ETF may wane after a week or so.
Bitcoin (BTC) reached an all-time high on Tuesday following the launch of ProShares’ Bitcoin Strategy exchange-traded fund (ETF), BITO, but JPMorgan Chase strategists believe investor concern about inflation is the primary driver.
According to JPMorgan strategists, the BITO launch, which saw the highest-ever first-day natural volume for an ETF, is “unlikely to trigger a new phase of significantly more fresh capital entering Bitcoin.”
Instead, JPMorgan believes that as gold failed to respond to concerns over rising cost pressures in the last couple of weeks, Bitcoin’s renewed role as a better hedge against inflation in the eyes of investors is the main reason for the current bull run. The team highlighted that the shift away from gold ETFs into Bitcoin funds has bee gathering speed since September and “supports a bullish outlook for Bitcoin into year-end.”
The JPMorgan strategists exemplified the waning interest after the first week following the launch of the Purpose Bitcoin ETF (BTCC) in Canada, claiming that the initial hype surrounding BITO could also fade after a week.
ProShares’ Bitcoin Strategy ETF, the first Bitcoin futures-linked ETF in the United States, began trading on the New York Stock Exchange on Tuesday at an opening price of $40 per share. It gives investors direct access to cryptocurrency futures in a regulated market.
JPMorgan’s remarks echo those of others in traditional finance. Billionaire investor Carl Icahn praised Bitcoin as a great inflation hedge as the next market crisis approaches.
Bill Winters, CEO of the British bank Standard Chartered, recently stated that “it’s perfectly reasonable for people to want an alternative to fiat currency.”