Much of bitcoin’s recent rally has been attributed to the tremendous success of the first bitcoin ETF to trade on Wall Street. The ProShares ETF had seen over $1 billion in trading volume in the first 24 hours alone. However, JPMorgan analysts do not believe that this is the driving force behind BTC breaking a new all-time high this week.

Notwithstanding the hype brought into the market by the success of the ETF, the analysts said that the ETF was not really behind this rally. Bitcoin which surpassed $67K for the first time after the ETF had debuted on the market has maintained a mostly upward momentum since then. The analysts released a note this week highlighting other factors which they say have been the major driver behind the bull rally.

In the note which was released on Wednesday, the JPMorgan analysts revealed the factor they say is the real driver of the recent rally. The note pointed to growing inflation concerns as being the push behind bitcoin. Apparently, the rising need for a better hedge for inflation has pushed investors towards the crypto market.

The analysts acknowledged the role that the Bitcoin ETF had played in the rise in momentum in the asset. But explained that they did not believe it had solely driven the digital asset towards its recent highs. Instead, as inflation rates have risen over the years, there have been growing fears among investors about making sure their assets did not depreciate due to inflation.

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“We believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into bitcoin funds since September,” the analysts said.

This is in line with investor sentiment in the investments space recently. Gold has consistently given negative returns in recent years and this is no longer a safe bet as a hedge against inflation, with the asset “behaving more as a real rate proxy rather than inflation hedge.”

The analysts did not completely dismiss the impact that the success of the Bitcoin ETF has had on the market. In the note, the analysts explain that the launch of the Bitcoin ETFs will promote a shift towards a more bullish outlook in the market.

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Bulls see this as an opportunity for more money to come into the market and they are not wrong. This was proven by the sheer number of trading that the first-ever Bitcoin ETF had recorded when it had begun trading on Tuesday.

However, the analysts added that the ETF launch could follow the path of the Purpose Bitcoin ETF in Canada. They pointed out that this could indicate that interest in the ETF could die off after only a week.

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