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.