Insights Trends Bitcoin Beats Gold in Investor Portfolio Allocation

Bitcoin Beats Gold in Investor Portfolio Allocation

March 18, 2024 Trends
BITmarkets | Bitcoin Beats Gold in Investor Portfolio Allocation

Bitcoin has now surpassed gold in terms of allocation in investors' portfolios when considering volatility, a JP Morgan analyst has stated.

According to Nikolaos Panigirtzoglou, a managing director at JPMorgan, Bitcoin's allocation in investors' portfolios is 3.7 times that of gold once volatility is accounted for.

The analyst pointed out the significant investments exceeding $10 billion into spot Bitcoin exchange-traded funds (ETFs) following their authorization in January, suggesting that the Bitcoin ETF market could potentially expand to $62 billion, with gold serving as a reference point.

A separate study by JPM Securities anticipates that the market for spot Bitcoin ETFs might balloon to $220 billion within the next two to three years, stating:

“We estimate $220B of incremental flows will come into the ETFs over the next three years, which could also be quite impactful to Bitcoin’s price given the multiplier on capital.”

The introduction of Bitcoin ETFs has been beneficial for the cryptocurrency market, as Bitcoin, the premier cryptocurrency, saw its market capitalization increase by over 45% in February.

Sales of spot Bitcoin ETFs rose to $6.1 billion in February, up from $1.5 billion in January.

Record daily inflows into spot Bitcoin ETFs exceeded $1 billion on March 12, with expectations for this figure to increase once the outflows from the Grayscale Bitcoin Trust ETF cease.

With the Bitcoin halving event just around the corner, reducing the daily BTC supply by half, demand is expected to spike, potentially leading to a supply crisis within the next six months, according to Ki Young Ju, CEO of CryptoQuant, a crypto analytics firm.

Following a lengthy cryptocurrency downturn lasting nearly three years, the approval of spot Bitcoin ETFs has been a turning point for Bitcoin's significant price movements, surpassing previous peak prices of over $69,000 and facilitating institutional engagement, notably by the world's largest asset manager, BlackRock.



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