A new report by investment manager VanEck states that institutional investors have approximately $50 billion in Bitcoin currently in circulation. Although investors are waiting for approval for spot Bitcoin ETFs, these assets are distributed among exchange traded funds (ETFs), national, and listed and private companies
A new report by investment manager VanEck states that institutional investors have approximately $50 billion in Bitcoin currently in circulation. Although investors are waiting for approval for spot Bitcoin ETFs, these assets are distributed among exchange traded funds (ETFs), national, and listed and private companies.
According to the investment company, hedge funds and asset management companies have begun to view Bitcoin (BTC) as an effective portfolio diversification tool due to its potential to hedge against inflation. Unlike gold, Bitcoin's immutable trading history makes it less susceptible to fraud, and its ability to be divided into smaller units makes it a superior form of payment.
VanEck states that Bitcoin can increase returns with minimal negative impact
VanEck also confirmed that Bitcoin increased returns without significant risk in the investment portfolio, with 40% allocated to bonds and 60% allocated to stocks. The company expects the price of the asset to rise around halving in the spring of 2024, a process that will reduce the amount of Bitcoin released per successfully mined block.
VanEck indicates that Bitcoin may rebound before and after the next halving
Here are some investment ideas to consider during the halving period.
The new upgrade of Bitcoin RGB Layer 2 will allow investors to tokenize bonds and other assets using the existing structure of the Bitcoin network, thereby improving the practicality of the network. Earlier this year, Citigroup predicted that the tokenization of private equity market assets such as real estate would increase 80 times by 2030.
Tokenization digitizes the assets that buyers and sellers can exchange through blockchain. So far, most projects have solved asset transfer through licensed blockchain rather than public networks like Bitcoin.
Approval of spot Bitcoin may threaten futures ETFs
VanEck operates an exchange traded fund based on Bitcoin futures, managing approximately $44 million in assets. The US Securities and Exchange Commission has not yet approved the US spot Bitcoin ETF, and analysts believe that for long-term holding of Bitcoin, this fund is more preferable than futures funds.
Before the approval of spot ETFs, institutions held Bitcoin
VanEck has joined several Wall Street heavyweights such as Fidelity, Invesco, Bitwise, and BlackRock in applying to launch spot Bitcoin ETFs. Unlike futures ETFs that track futures contract prices linked to Bitcoin prices, spot products will provide investors with direct access to Bitcoin.
This time-tested ETF tool may attract a large influx of investors, thereby expanding its market size to $100 billion. It may also lead to the outflow of futures funds with lower capital efficiency.
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