JP Morgan analysts have revealed that there has been a surge in demand for Bitcoin by institutional investors lately which they attribute to the recent Bitcoin price rally the number one cryptocurrency experienced.

According to a Markets Insider report, U.S. big bank JPMorgan said there are many reasons Bitcoin price continue to surge which includes institutional investors appetite, assurances that the U.S. won’t ban BTC, and the recent rise of the Lightning Network.

JP Morgan analysts further stated that these investors may be seeing BTC as a better hedge to gold especially as inflation concerns continue to heighten.


“The re-emergence of inflation concerns among investors has renewed interest in the usage of bitcoin as an inflation hedge,” JPMorgan said. “Institutional investors appear to be returning to BTC perhaps seeing it as a better inflation hedge than gold.”

JP Morgan noted in the report that the trend of institutional money flowing out of gold and into bitcoin has reemerged. Big investors who have endorsed BTC as a better store of value than gold has encouraged an increased flow of money into BTC.

Regulatory assurances in US adds to Bitcoin price rally

Another reason why there has been a BTC price surge comes from comments by the U.S. Federal Reserve chair Jerome Powell and Security and Exchange Commission Chairman Gary Gensler that there is no intention to ban bitcoin in the country, indicating that the U.S. won’t be following China’s steps.

Gensler and Powell both assured regulators in the country that they have no plan to ban crypto as their intentions are only to properly regulate the space and bring an end to illegal activities crypto’s are used for in the country.

The debate on how the US authorities would regulate crypto is still on with Gensler calling on other European leaders to get in line for proper crypto regulation.

Lightning Network and 2nd layer payment

“The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s bitcoin adoption” have also helped grow confidence in the Bitcoin network and its ability to scale, JPMorgan said.

The Lightning Network is the main Layer-2 solution for BTC, designed in an effort to make small bitcoin transfers cheaper and faster. The current capacity of the network stands at around 2,955 BTC (over $123 million at current prices), meaning its users can move (send and receive) this much worth of amount via the network.