Bitcoin has surpassed gold in terms of investor portfolio allocation after taking into account volatility, according to a JP Morgan analyst. Nikolaos Panigirtzoglou, a managing director at JPMorgan, stated that when adjusted for volatility, Bitcoin’s allocation in investor portfolios is 3.7 times higher than that of gold. He also highlighted the significant inflow of over $10 billion into Bitcoin exchange-traded funds (ETFs) since January and predicted that the potential market size for Bitcoin ETFs could reach $62 billion, using gold as a benchmark. Another report from JPM Securities predicts that the spot Bitcoin ETF market could grow to as much as $220 billion in the next two to three years.
Bitcoin ETFs have had a positive impact on the crypto market, with the largest cryptocurrency gaining over 45% in market cap in February. Net sales for spot Bitcoin ETFs reached $6.1 billion in February, compared to $1.5 billion in January. The largest daily inflow for spot ETFs exceeded $1 billion on March 12, and analysts believe this number will increase further once outflows from Grayscale’s GBTC stop.
With the Bitcoin halving just a month away, the daily supply of BTC will be cut in half, potentially further fueling demand and leading to a supply crisis within the next six months, according to Ki Young Ju, the CEO of crypto analytics firm CryptoQuant.
After a prolonged crypto winter, the approval of spot Bitcoin ETFs has acted as a catalyst for Bitcoin’s price surge, pushing it beyond the previous all-time high of over $69,000 from the last bull cycle. Institutional adoption, led by BlackRock, the world’s largest asset manager, has also contributed to Bitcoin’s rise. Despite outflows from Grayscale’s GBTC ETF, the top nine out of the 11 approved ETFs have seen significant net inflows, totaling hundreds of millions of dollars.