- According to an analyst, US investors with $6 trillion in assets could eventually turn to Bitcoin.
- Retirees in the United States, collectively holding about $6 trillion in public pension assets, are increasingly looking at Bitcoin ETFs as a potential investment opportunity.
- Despite breaking entry records since their launch in January, the new spot Bitcoin ETFs have not yet fully demonstrated their potential, the analyst says.
US investors with $6 trillion in assets are increasingly looking at Bitcoin ETFs as a potential investment opportunity, according to an analyst. Despite breaking entry records since their launch in January, the new spot Bitcoin ETFs have not yet fully demonstrated their potential.
Bitcoin ETFs and Retirement Accounts
Darius Tabai, co-founder of the decentralized exchange Vertex, believes that the real power of these ETFs will be revealed when millions of people with retirement accounts are exposed to these products. He predicts that when this happens, “coins will be continuously bought”. Tabai, a former global head of metal trading at Merrill Lynch and Credit Suisse, explained that ETFs tend to suck in assets. “They go in one direction unless they are very poorly managed,” he said. However, after two months of aggressive entries, there were days with no entries at all in most funds and even some cases of net exits.
The Nature of Wall Street
According to Tabai, this is in the nature of Wall Street. “People don’t distribute their capital all at once,” he said. It is unlikely that financial advisors will advise their clients to invest a large percentage of their money in BTC. Instead, if a portfolio is already performing well, advisors can encourage their clients to allocate 1% to 5% of their funds to Bitcoin and scale over time.
Future Outlook
Tabai said, “When someone sets this up and presses the button, this order will buy forever.” He added, “When you get millions of people to do this, that’s when you see its real impact. This naturally takes time.” Tabai drew parallels with the launch of the gold ETF in 2004 and said it was largely underestimated by investors at the time. Despite initial skepticism, gold rose by about 370% in nearly seven years. Today, the largest gold ETF has over $61 billion in assets, and the price of the commodity is almost 500% higher than when ETFs were launched. Tabai argued that Bitcoin is in a similar situation today.
Conclusion
With the increasing interest in Bitcoin ETFs among US investors, especially those with retirement accounts, the potential for growth in the crypto market is significant. As financial advisors begin to recommend a small percentage of Bitcoin allocation in their clients’ portfolios, the impact on the market could be substantial. However, as with any investment, this process takes time and careful planning. The future of Bitcoin and its ETFs remains promising, but only time will tell the full extent of their potential.
