Bitcoin is an “economic side show” and fintech innovation is the story that will dominate financial services, according to JPMorgan.

Analysts at the bank said that despite bitcoin’s monster rally, the cryptocurrency is still beset by a number of issues that may prevent it from becoming a mainstream asset.

“Bitcoin prices have continued their meteoric rise with Tesla, BNY Mellon and Mastercard’s announcements of greater acceptance of cryptocurrencies,” JPMorgan said in a research note last week.

“But 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.”

Bitcoin has gained traction with major Wall Street banks and Fortune 500 companies, a development which has boosted its price and saw it hit $1 trillion in market value last week.

Investors have drawn comparisons between bitcoin and gold, viewing the former as a new digital store of value thanks to its limited supply — the total number of bitcoins that will ever exist is capped at 21 million.

JPMorgan’s own strategists say that bitcoin could rally as high as $146,000 as it competes with gold as a potential hedge against inflation in the coronavirus crisis.

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