Market reports and industrial data analysis reflect that the interest of institutional players in Bitcoin, the largest cryptocurrency, has been surging exponentially. According to experts at JPMorgan Chase, the mainstream adoption of Bitcoin might hurt gold market share, which is extensively used as a reserve asset.
Quantitative strategists, including Nikolaos Panigirtzoglou, consider that the price of the two assets probably diverge in upcoming years, as Bitcoin will likely pull investors away from gold. While addressing the users that was acquired by Bloomberg, JPMorgan’s strategists said:
“The adoption of bitcoin by institutional investors has only begun, while for gold, its adoption by institutional investors is very advanced. If this medium to longer-term thesis proves right, the price of gold would suffer from a structural headwind over the coming years.”
Institutional Uptake of Bitcoin is Soaring
Crypto experts believe that the rising institutional demand is driving the Bitcoin Bull run. The major institutional firms, including Grayscale, Paypal, and Cash App, have become more aggressive in acquiring bitcoin. The firms are buying more Bitcoin than is being mined.
Mike Novogratz, a billionaire investor, stated that Bitcoin is now an institutional asset. He said, “Bitcoin is now an institutional asset. Period. The good thing is most institutions aren’t in yet. It’s why 2021 will be as good or better than 2020.”
As reported earlier, Bitcoin has also surpassed Mastercard in terms of market capitalization. The 3% capitalization increase of Bitcoin sent Mastercard, a giant payment firm, to the 17th spot as its market cap dropped by almost 0.6%, as per AssetDash tracking. Since Bitcoin’s third halving in May, the price of the largest cryptocurrency has jumped abruptly. After rallying more than 110%, it is trading at $18,214, as of now.