Bittime - Good news for Bitcoin (BTC) investors! The huge demand for Bitcoin spot Exchange Traded Funds (ETFs) that has surged in the last two months is predicted to continue for years to come. This was stated by Matt Hougan, Chief Information Officer (CIO) Bitwise.
Hougan's statements are based on his interactions with investors and capital allocators interested in purchasing ETFs, including those managed by Bitwise. Through his personal Twitter account, Hougan shared several important points he obtained.
Bitcoin ETF Adoption is Uneven
One of the important points Hougan made was that there is a huge difference in the speed of adoption of Bitcoin ETFs. Some financial advisors and national platforms are already starting to integrate these products as soon as possible.
Meanwhile, other parties have not yet considered portfolio allocation for their clients or will not even provide these products on their platforms until next year.
"In fact, most professional investors currently still cannot buy a Bitcoin ETF. This situation will change through an individual due diligence process involving more than 100 parties in the next two years," wrote Hougan.
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Bitcoin ETF Attracts Billions of Dollars in Funds
Since its launch on January 11, the Bitcoin ETF has absorbed $11.7 billion in net inflow. This figure is even calculated after considering the $14.3 billion BTC outflow from the Grayscale Bitcoin Trust (GBTC). On March 26 2024 alone, additional funds were recorded amounting to $418 million, with $16.7 million of which was allocated to the Bitwise Bitcoin ETF.
This growth marks a significant increase compared to previous years. According to CryptoQuant, funds invested by institutions into Bitcoin via financial instruments jumped from less than $20 billion to more than $94.6 billion in the last six months, as interest in Bitcoin ETFs increased.
Also Read: How to Buy a Bitcoin ETF
On-Chain Data Powers High Demand
On-chain data (data recorded on the blockchain) also shows a rapid increase in accumulation addresses, namely Bitcoin addresses that are only used for buying and never selling.
Reporting from Decrypt, Julio Moreno, Head of Research CryptoQuant, revealed that they estimate monthly Bitcoin demand to increase from 40,000 Bitcoins in early 2024 to 213,000 Bitcoins. This significant growth in demand has been driven largely by purchases via ETFs, and more recently also by other large investors.
Also Read: Potential Impact of Bitcoin ETF Approval
Bitcoin Allocation Increases To 3%
Compared to previous years, Hougan also observed an increase in the ideal allocation of Bitcoin in investors' portfolios. Today, investors tend to allocate 3% or more, compared to 1% previously. Hougan argues that ETFs play an important role in this, as they have reduced the risk of Bitcoin in the eyes of many.
Previously, people were worried that Bitcoin could go to zero. In such situations, a 1% allocation is the maximum acceptable limit. However, if the probability of going to zero is no longer relevant, a 3% or 5% allocation starts to make sense.
Also Read: Pros and Cons of Investing in Bitcoin ETFs
Bitcoin Still "Under-invested" by Institutional Investors
According to James Butterfill, Head of Research at Coinshares, most institutional investors currently still have very low exposure to Bitcoin. The average Bitcoin allocation in their portfolio is only about 0.2%.
The ideal proportion of Bitcoin ultimately depends on the investor's risk appetite. An allocation of 4% would represent only an additional 100 basis points of risk in a regularly rebalanced portfolio.
Also Read How to Buy Crypto:
Conclusion
The soaring demand for Bitcoin ETFs is a strong indicator of the increasing interest of institutional investors in this leading crypto asset. With the potential for continued growth over the next years, Bitcoin ETFs are predicted to become an increasingly popular investment instrument. Investors need to pay close attention to recent developments and consider the investment opportunities offered by Bitcoin ETFs.
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How to Buy Crypto with Bittime
You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. Learn Complete Guide How to Buy Crypto on Bittime .
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
Also Read:
Bitwise Reveals Its Bitcoin ETF Address to the Public
Bitwise: Asset Management Firm and Bitcoin ETF Plans 2024
Bitwise CEO Leaks Code Bitcoin ETF Will Explode! Read the review
DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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