JP Morgan has been one of Bitcoin’s biggest detractors in the past
The continued rise of Bitcoin has caused some of its biggest critics to change their views on the scarce digital asset. Be the CEO of BlackRock, Laurence D. Fink, who once called Bitcoin a money laundering tool in 2017, now believes that Bitcoin would expand into a global market. Billionaire investor Ray Dalio took a twist in a recent comment in which he cautioned investors to beware of their investment in Bitcoin, as it may now be banned, believing that Bitcoin could act as an investment diversifier.
JP Morgan, one of the first critics of Bitcoin, who once infamously commented that Bitcoin is an internet bubble about to burst, now sees Bitcoin as a threat to the gold market. The investment banking giant believes that the rise of Bitcoin is occurring at the expense of gold and they are not wrong as there has been a significant outflow of gold capital, mainly moving towards Bitcoin.
According to CoinShares data, the Bitcoin market has posted an inflow of $ 1.4 billion of institutional money in the past few weeks and, during the same period, the gold market has seen an outflow of $ 9.4 billion mainly due to increased institutional interest in the “Digital gold”
Gold losing its brilliance faster than the market predicted?
Gold has been the infallible hedging asset for centuries, while institutions primarily have the precious metal over any other option. Thus, when the world was engulfed by the pandemic earlier this year, gold began to rise, despite the stock market and even Bitcoin registering massive losses during the first quarter of this year. The fall of Bitcoin similar to the traditional stock market has drawn many correlations with the S&P 500, and critics have come forward to discard the main cryptocurrency for the eleventh time.
If this was a shitcoin chart – yall would be buying the shit outta this pic.twitter.com/pa6NxCIaR4
– Shelly (@btcshelly) December 8, 2020
“#Gold vs #bitcoin: prices look like a huge rip off here.
If this were a shit chart – you would be buying the shit. ”
The Bitcoin halving, a highly optimistic event as it reduces the supply of Bitcoin in half, making it more scarce, occurred in May. Bitcoin tends to have a price increase months after halving, and the last quarter of 2020 ended up being the moment when the impact of halving made bitcoin the most profitable asset of the year.
However, the most important aspect of the ongoing bull run is that the rise is being carried out by institutional investors, rather than retail buyers, as in 2017. This is the reason why Bitcoin managed to prolong its rise with small hiccups. and price drops down the road.
It is important to remember that Bitcoin is just over a decade old, however it is worth noting the interest and value it has created. Gold is still a giant with its $ 9 trillion market capitalization against the $ 342 billion Bitcoin market, but BTC at its current value is highly undervalued and many predict it would increase from 10X to 100X in the next decade, decreasing the adoption of gold.