Approval of spot Bitcoin-ETF in the United States will simplify access to digital assets and reduce the risk of a balanced 60/40 portfolio through diversification. This is stated in a report K33 Research.
«We expect that the benefits of reducing overall volatility and risk-adjusted outperformance will be key strategies for market entry by various exchange-traded product providers,» the document notes.
Analysts say that since 2020 digital gold has proven its value as a powerful diversification tool.
According to their calculations, an investor with a 1% stake of assets under management (AUM) in Bitcoin in a traditional 60/40 portfolio would have outperformed the analogue without such changes by 3.16%.
In 2023 the diversification benefits from digital gold became even more evident amid lower correlation with risk assets and solid growth.
Experts forecast market consolidation until January 10, when the U.S. Securities and Exchange Commission is expected to deliver a positive decision on a Bitcoin-based ETF. They pointed to the market’s “muted” reaction to news around Binance, they said.
According to observers, CME futures premia on a year-over-year basis remain at 18%, and open interest (OI) is at an all-time high, indicating persistent bullish sentiment.
«Current market signals indicate that traders want to hold their positions into year-end. The contangocontango in December versus November is a massive 1.69%. This is higher than the previous record high in October 2021», they explained.
Open interest over the last 35 days rose by 32 011 BTC ($1.17 billion).
On offshore crypto-derivative exchanges, sentiment remains subdued, which reduces the likelihood of liquidations, the specialists noted.
Open interest has fallen to an 18-month low, and funding rates have returned to neutral levels.
Over the last eight weeks, investors poured into crypto products $1.32 billion, according to CoinShares. Inflows into Bitcoin funds during this period reached 3.4% of AUM ($30.78 billion).
Inflows into US-listed ETFs could amount to from $24 billion to $50 billion, Matrixport estimates.