Safe-haven attributes of s could potentially offer
Providers of spot Bitcoin exchange-traded funds (ETFs) are expected to increase their offerings, as Bitcoin continues to outperform traditional safe-haven assets such as gold and bonds.
The asymmetric returns and low correlation of Bitcoin make it an attractive asset for the newly launched spot Bitcoin ETFs. Institutional players are likely to contribute to the growing interest in crypto ETFs, supporting the success of these products.
According to a research report by Kaiko, Bitcoin has seen over $2 billion in net inflow since the launch of spot ETFs on January 10. This indicates a rising investor demand for Bitcoin as a safe-haven asset in uncertain market conditions.
The correlation between Bitcoin and the Nasdaq 100 index has significantly decreased over the past year and has been consistently close to zero since June 2023, as stated by Kaiko.
Bitcoin has established itself as a safe-haven asset with its low correlation to traditional markets. Its appeal is further enhanced by its ability to deliver higher returns compared to assets like gold, U.S. bonds, and the dollar. During the U.S. banking crisis in 2023, Bitcoin attracted significant investments as a safe-haven asset.
In 2023, gold prices increased by 15%, reaching a record annual close at $2,078 per ounce. In contrast, Bitcoin gained over 154%, contributing $530 billion to its market capitalization.
However, at present, Bitcoin is struggling to surpass the $40,000 threshold due to consistent sales of Grayscale’s Bitcoin Trust (GBTC). Grayscale Investments sold over $2.14 billion in BTC following the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission.
As competition grows, asset managers are reducing fees for European Bitcoin ETFs.
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