Bitcoin—not gold—is the new inflation hedge, says JPMorgan

When it comes to hedges against inflation, Bitcoin is looking more and more like the new gold, according to a note JPMorgan shared with clients Thursday.

Bitcoin has been on a run lately, surpassing $50,000 for the first time in a month, and up 87% year to date. Gold is down 7.3% in the same time span.

Bitcoin has seen large fluctuations this year, but that doesn’t seem to be bothering investors. According to JPMorgan’s Thursday note, “Institutional investors appear to be returning to Bitcoin, perhaps seeing it as a better inflation hedge than gold.”

The note comes as no surprise for those who have been following investments in Bitcoin in 2021. In April, the crypto exchange Coinbase noted in its first quarter report that of the $335 billion in trades the company hosted that quarter, $215 billion came from more than 8,000 institutional investors.

Part of the motivation for these deep-pocketed investors to invest in Bitcoin and other similar cryptocurrencies is their built-in protection against inflation.

“The reemergence of inflation concerns among investors has renewed interest in the usage of Bitcoin as an inflation hedge,” the report said.

Recently, some well-known investors have given cryptocurrencies a nod of approval. Dawn Fitzpatrick, head of George Soros’s hedge fund, Soros Fund Management, disclosed at a Bloomberg event that the fund owns some coins, but “not a lot,” she said.

The Shark Tank star and businessman Kevin O’Leary said this week that his crypto holdings outweighed the allocation of gold in his portfolio.

JPMorgan had noted in a May report that institutional investors were switching from Bitcoin to gold, but still maintained that the cryptocurrency could hit $140,000 in the long term.

As the price of the coin continues to rise, the report points to assurances by U.S. policymakers that they would not follow China in banning the usage or mining of crypto, as a catalyst.

“The recent rise of the Lightning Network and 2nd layer payments solutions helped by El Salvador’s Bitcoin adoption” was also a boon for Bitcoin, according to the report.

Bitcoin was trading at $54,343 as of Friday afternoon, up about 0.37% over the past 24 hours. Although the cryptocurrency broke $50,000, it is still short of its record of nearly $65,000 in April.

This story was originally featured on Fortune.com