Bitcoin’s surge this week to record highs is being driven by inflation, not necessarily by exuberance over the newly launched, first-ever U.S. Bitcoin-linked exchange-traded fund, according to JP Morgan & Co. strategists.

Bitcoin was trading at $62,578 as of this writing, after reaching a record high of $66,999 on Wednesday. Some investors and analysts have attributed its rally to the strong debut of the new ProShares Bitcoin Strategy ETF, broader institutional and financial services adoption, and the appearance of government support. Regulators have said recently that they are not looking to ban Bitcoin.

The rising cost of everything has renewed investors’ interests in Bitcoin as an asset that can act as a hedge against inflation, Bloomberg reported. Gold has failed to respond in recent weeks to growing concerns about rising cost pressures, and the shift away from gold ETFs into Bitcoin funds has grown.

Federal Reserve Chairman Jerome H. Powell and Treasury Secretary Janet L. Yellen downplayed inflation risks on March 24 when they testified before the House Financial Services Committee. Now the Fed is singing a different tune. Pandemic-induced pressures such as supply chain disruptions may last longer than initially expected, Atlanta Federal Reserve Bank President Raphael Bostic said earlier in October.

Rising prices are being felt around the world. Inflation could lead to higher interest rates, making assets such as high-growth tech stocks less attractive, Markets Insider reported. Investors looking for places to protect their cash from high prices have led to a shift from gold into bitcoin, the JP Morgan analysts said. That flow was “very intense” during Q4 of 2020 and the beginning of 2021, and has accelerated in recent weeks, they noted.

“This flow shift remains intact supporting a bullish outlook for Bitcoin into year-end,” JP Morgan & Co. strategists including Nikolaos Panigirtzoglou wrote in a note Wednesday. “…While we accept that bitcoin momentum has shifted steeply upwards since the end of September, we are not convinced the anticipation of BITO’s launch was the main reason…

“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.”

ProShares Bitcoin Strategy ETF BITO debuted this week as the second-most heavily traded fund ever. It saw more than 29 million shares traded on Wednesday, representing $1.2 billion-plus. The fund has assets of $1.1 billion, according to the company — the quickest an ETF has hit the $1 billion mark, according to Bloomberg Intelligence.

Excitement could fade within a week over the ProShares Bitcoin Strategy ETF, as it did over similar ETFs launched outside the U.S. after the initial excitement and hype died down, JP Morgan strategists said.

Bitcoin investors already have a “multitude of investment choices,” they wrote. For example, they mentioned Canada’s Purpose Bitcoin ETF (BTCC), which started strong and then faded. “The initial hype with BITO could fade after a week,” JP Morgan strategists wrote. 

READ MORE: Atlanta Fed Chief Bostic Warns U.S. About Inflation: Significant Uncertainty How Long It Will Last

Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?