Experts Highlight Benefits of Spot Bitcoin ETFs for Everyday Investors
Date: 2023-11-26 Author: Dima Zakharov Categories: BUSINESS
Simplifying Access to Digital Assets
The recent approval of spot Bitcoin ETFs in the US is anticipated to streamline access to digital assets and mitigate risk in investment portfolios. K33 Research's report emphasizes the advantages of diversification, foreseeing reduced overall volatility and a proactive approach in managing market risks for various exchange-traded product providers.
Value in Diversification
According to analysts, since 2020, digital gold has proved its worth as a powerful diversification tool. Calculations indicate that even a 1% allocation of Bitcoin in a traditional 60/40 portfolio would have outperformed a similar portfolio without such adjustments by 3.16%.
Clearer Benefits in 2023
In 2023, the benefits of diversification using digital gold became even more apparent amidst decreased correlation with risky assets and significant growth. Experts predict market consolidation by January 10, coinciding with the expected positive decision by the SEC regarding the first cryptocurrency-based exchange-traded fund. This anticipation contrasts with the modest market response to the news surrounding Binance, experts noted.
Bullish Sentiments and Market Observations
Analysts note that futures premiums on CME remain at 18% annually, with record-high open interest (OI), indicating strong bullish sentiments. Meanwhile, on offshore crypto derivative exchanges, restrained sentiments decrease the likelihood of liquidations, signaling a stable market.
The open interest dropped to an 18-month low, and funding rates have returned to neutral values, highlighting a stabilizing market environment.
