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Why Bitcoin Might Finally Be Ripe for Institutional Adoption

ByUlrik Lykke
Published 06/02/2024, 17:49

Bitcoin Enters Accumulation Phase Post ETF

Bitcoin's price has been range bound over the past week, trading between $42K and $43.5K as the excitement around the spot ETF approvals continued to cool down.

However, it's noteworthy that net daily inflows have remained positive for the last seven consecutive trading days, with BlackRock and Fidelity taking the lead.

BTC Inflows
Source: BitMEX Research

Bitcoin ETFs in Top10 for January
Fidelity and BlackRock’s ETFs secured positions in the top 10 ETFs measured by inflows during January. BlackRock’s iShares Bitcoin Trust (IBIT) claimed the eighth spot with an estimated $2.6 billion in net flows, while Fidelity Wise Origin Bitcoin ETF (FBTC) secured the tenth place with $2.2 billion in net flows.

Not too shabby for ETFs that launched less than a month ago!

The Supply Shock Will Come…

While it is still too early to predict precisely when the institutional adoption of BTC will have a significant and long-term positive impact on the price, industry experts — the latest being ARK Invest — seem to agree that Bitcoin might be finally ripe for institutional adoption.

Here’s why:

  1. Bitcoin has outperformed every major asset over longer term horizons

  2. Bitcoin’s correlation with traditional assets is low (0.27 over the past five years)

  3. Bitcoin could play a major role in maximising risk-adjusted returns

Annualized Returns of Major Asset Classes

Source: ARK Invest

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