Bitcoin's allocation in investor portfolios surpasses gold when adjusted for volatility, with significant ETF inflows. Predictions suggest substantial growth in ETF market size, impacting Bitcoin's price. Analysts foresee a supply crisis amid halving. Institutional adoption and ETF approval fuel BTC's price surge.
Bitcoin (BTC) has surpassed gold in terms of investor portfolio allocation when adjusted for volatility, as per analysis from a JP Morgan expert.
According to JPMorgan managing director Nikolaos Panigirtzoglou, Bitcoin’s allocation in investor portfolios is now 3.7 times greater than that of gold when volatility is taken into account.
Pointing to a significant inflow of over $10 billion into Bitcoin exchange-traded funds (ETFs) since January, the analyst suggests that the potential market size for Bitcoin ETFs could reach $62 billion, using gold as a benchmark.
Another analysis from JPM Securities forecasts that the spot Bitcoin ETF market could expand to as much as $220 billion within the next two to three years.
"We anticipate that $220B of additional flows will enter the ETFs over the coming three years, which could have a significant impact on Bitcoin’s price due to the capital multiplier,” analysts led by Devin Ryan stated.
The emergence of Bitcoin ETFs has proven beneficial for the cryptocurrency market, with the largest cryptocurrency witnessing a surge of over 45% in market cap in February alone. Net sales for spot Bitcoin ETFs climbed to $6.1 billion in February, a notable increase from $1.5 billion in January.
The highest daily inflow for spot ETFs peaked at over a billion dollars on March 12, with analysts anticipating further increases once outflows from GBTC cease.
With the Bitcoin halving event just over a month away, the daily supply of BTC is set to be halved, potentially intensifying demand and leading to a supply crisis within the next six months, according to Ki Young Ju, CEO of crypto analytic firm CryptoQuant.
Following a prolonged crypto winter spanning nearly three years, the approval of spot Bitcoin ETFs has acted as a catalyst for BTC’s significant price surge, surpassing the all-time-high of the previous bull cycle at above $69,000. This surge is accompanied by institutional adoption, notably from BlackRock, the world’s largest asset manager.
Despite significant outflows from Grayscale’s GBTC ETF, the top nine out of 11 approved ETFs have attracted hundreds of millions of dollars in net inflow.