After a week of net outflows, the bitcoin ETF spot market has rebounded with impressive net inflows this week, highlighting investors' growing confidence in bitcoin and its associated financial products. Market activities this week have shown a notable reversal from the previous five-day streak of net outflows, with a substantial net inflow of $480 million recorded on Tuesday, followed by $243.5 million on Wednesday.
Yesterday's resurgence in investor interest was notably boosted by Blackrock's massive $323.8 million inflow, effectively offsetting Grayscale GBTC's $299.8 million outflows. Additionally, Ark Invest's ARKB reported its best day yet, with $200 million in inflows, even though Fidelity experienced its worst day with just $1.5 million in outflows. However, Fidelity managed to bounce back with significant inflows of $261 million and $279 million on Monday and Tuesday, respectively.
Yesterday's ETF flows were positive by $243.5 million.
Blackrock finally woke up again for $323.8 million completely canceling itself $GBTCoutputs of 299.8 million dollars.
Ark had its best day yet with $200 million. Fidelity had its worst day at $1.5 million.
Price dumped in… pic.twitter.com/LLChkITN7q
– WhalePanda (@WhalePanda) March 28, 2024
1% down, 99% left for bitcoin ETF
However, according to Matt Hougan, Bitwise's chief investment officer (CIO), this is just the beginning of what's to come in the coming months. Hougan's comment, part of his weekly memo to investment professionals, sheds light on current market dynamics and the colossal potential ahead. “1% less; 99% left,” Hougan wrote, highlighting the nascent but promising journey of bitcoin ETFs.
Lately, the market has been characterized by volatility, with the price of bitcoin fluctuating between $60,000 and $70,000. Hougan recommends a calm, long-term outlook amid this fluctuation, especially as the sector anticipates the next bitcoin halving around April 20, the approval of bitcoin ETFs on national account platforms, and the upcoming completion of due diligence by various investment institutions. committees.
Despite bitcoin's current sideways price movement, Hougan remains optimistic about its long-term trajectory. “bitcoin is in a raging bull market,” he says, pointing to a nearly 300% rise over the past 15 months. The launch of bitcoin Spot ETFs in January marked a major milestone, opening up the bitcoin market to investment professionals on an unprecedented scale.
Hougan's analysis points to a profound shift as global wealth managers, who collectively control more than $100 trillion, begin to explore investments in “digital gold.” He suggests that even a conservative allocation of 1% of your portfolios to bitcoin could result in approximately $1 trillion of inflows into the space.
This view is supported by historical data showing that even a 2.5% allocation to bitcoin has improved the risk-adjusted returns of traditional 60/40 portfolios in every three-year period of bitcoin's history.
Hougan believes that the recent capital inflows into bitcoin ETFs, while impressive, are simply the beginning of a much broader movement. “We are all excited about the $12 billion that has flowed into ETFs since January. And it’s exciting: overall, the most successful ETF launch of all time… But let’s imagine that global wealth managers allocate just 1% of their portfolios to bitcoin on average,” explains Hougan, emphasizing the scale of growth. potential that awaits the cryptocurrency market. He concludes:
Think about the implications. (…) A 1% allocation across the board would mean ~$1 trillion of inflows into this space. Faced with this, $12 billion is just an initial payment. 1% less, 99% remaining.
At the time of publication, btc was trading at $70,644.
Featured image created with DALL·E, chart from TradingView.com
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