Bitcoin has surpassed gold in terms of portfolio allocation for investors when adjusted for volatility, according to a statement made by JPMorgan managing director Nikolaos Panigirtzoglou. He noted that Bitcoin’s allocation in investor portfolios is 3.7 times greater than that of gold when accounting for volatility.
Panigirtzoglou also pointed out that over $10 billion has flowed into Bitcoin exchange-traded funds (ETFs) since their introduction in January of this year. He believes that the potential market size for Bitcoin ETFs could reach $62 billion, using gold as a benchmark. Furthermore, a report from JPM Securities predicts that the spot Bitcoin ETF market could grow to as large as $220 billion within the next two to three years.
The introduction of Bitcoin ETFs has had a positive impact on the cryptocurrency market as a whole. In February, Bitcoin’s market cap increased by over 45%. Net sales for spot Bitcoin ETFs reached $6.1 billion in February, compared to $1.5 billion in January. On March 12, the largest daily inflow for spot ETFs exceeded $1 billion, and analysts believe this number will continue to rise once outflows from Grayscale’s GBTC stop.
With the upcoming Bitcoin halving in just over a month, the daily supply of BTC will be reduced by half. This could potentially further increase demand and lead to a supply crisis within the next six months, according to Ki Young Ju, the CEO of crypto analytics firm CryptoQuant.
After a prolonged period of stagnation in the crypto market, the approval of spot Bitcoin ETFs became a catalyst for Bitcoin’s significant price surge, surpassing the all-time high of the previous bull cycle at over $69,000. This price action, coupled with institutional adoption led by BlackRock, the world’s largest asset manager, has resulted in hundreds of millions of dollars in net inflow for the top nine out of the 11 approved ETFs, despite outflows from Grayscale’s GBTC ETF.