Bitcoin Is a Better Hedge Against Inflation Than Gold, Says JP Morgan

Bitcoin has been on a wild run this year, gaining and losing huge values repeatedly.

Bitcoin Is a Better Hedge Against Inflation Than Gold, Says JP Morgan

Bitcoin recently breached the $50,000 price mark

Highlights
  • Bitcoin has seen high volatility this year
  • The crypto reached an all-time high of about $64,000 in April
  • That bull run was cut short by a cryptocurrency market crash in May

Bitcoin is taking the charm off gold. In a note to investors, JP Morgan, the leading American investment banking company, said that Bitcoin is appearing to be a better hedge against inflation than gold. Bitcoin supporters have long tried to assert that the cryptocurrency promises better and quicker returns than gold and many people prefer it as a store of value. Both these features are usually associated with gold. Critics, however, say Bitcoin is extremely volatile and there's no guarantee that it will always exhibit a growth trajectory.

Yet, Bitcoin price has surpassed the $50,000 (roughly Rs. 37.56 lakhs) mark for the third time this year. While this shows Bitcoin's vulnerability to rise and fall in quick succession, it also makes the case that investing in it may eventually pay off.

“Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold,” JP Morgan's note reportedly read. Commenting on the company's observation, Fortune magazine said that the note “comes as no surprise” for those who have been closely following Bitcoin's performance this year.

Bitcoin has seen high volatility this year. In February, it surpassed the $50,000 mark for the first time and then reached an all-time high of about $64,000 (Rs. 48.08 lakhs) in April. That bull run was cut short by a massive cryptocurrency market crash in May and Bitcoin lost all its gains this year, hitting a trading value of below $30,000 (Rs. 22.53 lakhs). It took some time to emerge out of that slumber and by July it was again trading around $40,000 (Rs. 30.05 lakhs). In August, Bitcoin again breached the $50,000 mark but lost the gains. A month later, it hit the milestone for the third time. Bitcoin was trading at $54,719 (Rs. 41.11 lakhs) Saturday afternoon.

JP Morgan believes this third rally is fuelled by “the reemergence of inflation concerns among investors” and they are trying to use Bitcoin as a hedge against it.


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency Prices across Indian exchanges

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Further reading: JP Morgan, Bitcoin, Cryptocurrency, Gold
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