In a story first covered by CNBC, analysts from the top U.S. bank dismissed the recent superficial growth in Bitcoin’s price as an “economic sideshow” during the current global COVID-19 pandemic. According to the report, fintech development and digital payment systems will be the major story arising from the financial field in current pandemic times.

The price of Bitcoin has soared past $58,000 to set new all-time highs in 2021 as institutional investment soars from firms such as MicroStrategy, Tesla and MasterCard entered the Bitcoin market, a note from JP Morgan reads. However, it is the fintech innovations that will get the credit in the long term, it further states.

“Fintech innovation and increased demand for digital services are the real Covid-19 story with the rise of online start-ups and expansion of digital platforms into credit and payments.”

Over the past year, there have been increased efforts by non-financial firms such as Google and Apple to get into the fintech space. As financial firms invest heavily in technology, these Big Tech companies are moving rapidly to capture the digital payments market. With an advantage in digital spaces by owning a huge amount of consumer data, big tech firms rapidly narrow the gap to financial institutions and banks.

Bitcoin, on its part, saw a boost in demand, reaching the $1 trillion market cap, as investors looked for “diversification assets” during the pandemic. Comparisons with gold as a store of value is also increased over the year. JP Morgan previously stated the digital coin could rally as high as $146,000 as it competes with gold as a hedge against inflation during the COVID-19 pandemic.

Despite the optimistic price targets (which could take years to achieve), JP Morgan analysts warn cryptocurrencies are still the “poorest hedge” against stock prices and still hold a questionable amount of risk.

As previously reported, JP Morgan Chase Co-President, Daniel Pinto stated the bank could invest in Bitcoin if there’s a demand for the crypto. However, strategists at the bank revealed a report stating BTC’s price is “unsustainable” at $52,000 claiming volatility will kill the current hype cycle in the market.

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