As the total market capitalization of the cryptocurrency space continues to grow and potentially reaches $10 trillion, Bloomberg Intelligence analyst Jamie Coutts has suggested that some funds that employ specific trading strategies could see their assets under management explode upwards.
In a series of posts, Coutts told his followers on microblogging platform proliferation of systematic and factorial assets". based strategiesโ.
The total market capitalization of the cryptocurrency space currently stands at $1.4 trillion, up from $800 billion seen at the beginning of the year, when the space began to recover from a bear market in which the price of The flagship cryptocurrency, Bitcoin, plummeted from an all-time high of $69,000. high to low around $16,000.
Bitcoin is now trading at $36,500 as the cryptocurrency market recovers, partly on hopes that a Bitcoin exchange-traded fund (ETF) will list in the United States, according to analysts. Major financial powerhouses that collectively manage a staggering $27 trillion in assets are venturing into the world of Bitcoin and cryptocurrencies after a race to list such a fund began.
BlackRock, the world's largest asset manager, made a pioneering leap on June 16 with a Bitcoin exchange-traded fund filing, seemingly setting off a domino effect as peers rushed to file similar filings.
It is important to note that the figure of $27 trillion represents a large total of assets under management in the aforementioned institutions, and only a minuscule fragment of this gigantic sum is expected to be channeled into cryptocurrency investments.
Coutts, in a separate post, also noted that he does not believe the recent price increases in the cryptocurrency market are just the result of the hype around a potential Bitcoin spot ETF, adding that in the first quarter of the year Bitcoin was โsending the price clearer.โ โOne of the singular things is that the very nature of asset allocation was changing.โ
In the first quarter, the Bloomberg analyst said that "the spread between the risk-adjusted return of BTC and global assets, although narrowing since 2013, has reversed over the last 3 years (or the last BTC cycle) ".
Notably, Bitcoin whales have made profits over the course of the past week after redistributing around 60,000 BTC worth around $2.22 billion, following a 30-day surge of around 35% for the cryptocurrency.
The price of BTC recently briefly dipped below $36,000 mark after data from the US Department of Labor revealed that inflationary pressures eased in the country last month, showing that underlying consumer prices, which exclude food and energy, fell to the lowest level in two years and cast doubt on the Federal Reserve's plans to raise interest rates. rates soon.
The Department of Labor reported that the general consumer price index for October was 3.2%, well below the 3.7% recorded in September and below market expectations of 3.3%. Compared to the previous month, inflation remained stable in October, down from 0.4% in September and 0.6% in August.
Core inflation, which is a more stable measure of price changes, slowed to 4.0%, the weakest since 2021, while the monthly increase of 0.2% was also in line with forecasts from the analysts. In response to the numbers, the S&P 500, the stock market benchmark, rose significantly.
Featured image via unpack.
