Bitcoin’s inflation narrative more compelling than ETF fever, JPM says

The Wall Street bank is trying to pinpoint the fuel behind bitcoin’s latest rally.

This week’s launch of the ProShares Bitcoin Strategy Exchange-Traded Fund (BITO) may have aided the cryptocurrency’s recent price surge to an all-time high, though the perception of bitcoin as an inflation hedge over gold is probably a bigger factor, a JPMorgan strategist wrote Thursday.

• In its first two days of trading, BITO amassed assets of over $1 billion, according to ProShares.

• Bloomberg ETF analyst Eric Balchunas says the new ProShares fund is the fastest in the history of the ETF industry to reach $1 billion in two sessions; such an ascent eclipsed the SPDR Gold Trust (GLD) ETF’s 18-year record at three days to reach this level.

• JPMorgan strategist Nikolaos Panigirtzoglou wrote in a note to clients that there’s been a shift from gold ETFs into bitcoin funds since September, and there are already existing vehicles for investors to gain bitcoin exposure; the bank sees this shift in flows being bullish for bitcoin into year-end.

• BITO saw trading volume of over 29 million shares Wednesday, representing over $1.2 billion, according to a representative from the company.

• Separately, billionaire investor Paul Tudor Jones told CNBC earlier this week he currently prefers bitcoin over gold as an inflation hedge.