Because, if you want to directly own bitcoin, investors need to set up and manage their own electronic wallets or accounts at cryptocurrency exchanges, many of which have poor security. security, there is always the risk of facing attacks.
JPMorgan strategists call for a reduction in bitcoin holdings ahead of the highly anticipated halving in April 2024. Bitcoin Halving, also known as block halving, is the process of reducing the rate at which new cryptocurrencies are created. This term can also be understood as the process of halving the reward for miners when mining a new block of bitcoin.
The purpose of halving the block is to avoid the risk of inflation for the world’s largest coin. This causes the supply of bitcoin to be limited, and eventually there will be no more than 21 million bitcoins in the world. That’s often the factor behind a new price increase.
“The pace of net inflows into spot bitcoin ETFs has slowed markedly, with significant outflows seen over the past week,” the strategists said. As we get closer to the halving, this profit-taking is likely to continue.”
Bitcoin cryptocurrency in Caracas, Venezuela. Photo: AFP/TTXVN Last month, JPMorgan bank predicted that bitcoin price would drop to 42,000 USD/BTC after April, when “the excitement created by the halving event subsides”. Although bitcoin set a record of nearly $73,798/BTC on March 14, retail traders’ enthusiasm may be waning, according to Naeem Aslam, Chief Investment Officer at Zaye Capital Markets.
Previously, the British Financial Conduct Authority (FCA) said it would allow the creation of securities related to cryptocurrencies. Previously, US officials gave the green light to spot bitcoin ETFs, making it easier for mainstream investors to include bitcoin in their investment portfolios.
In addition, bitcoin’s rise is also supported by the weakness of the USD, as recent US employment data has reinforced speculation that the US Federal Reserve (Fed) is still on track to interest rate cut in June.
Expert Fiona Cincotta of financial company City Index said the cryptocurrency market has increased by 350% from the low of 2022 and shows almost no signs of stopping. She predicted $100,000/BTC could be bitcoin’s “natural next target,” but warned that the currency could fall as fast as it rose.
In the opinion of financial experts, the most important difference in the bitcoin wave in recent months has been mainly driven by large institutional investors. “Traditional asset investment institutions used to be on the sidelines,” said Nathan McCauley, CEO of digital asset platform Anchorage Digital. Currently, they are the main growth driver of the cryptocurrency market.”
In a recently released report, analysts from Deutsche Bank said that new bitcoin spot ETFs have acquired nearly billions of dollars in digital currency assets, since the SEC approved them. this fund. Black Rock Fund and Fidelity, two of the world’s largest asset managers offering spot bitcoin ETFs, have seen more than $9.2 billion and $5.3 billion in inflows into bitcoin, respectively.
Recently, BlackRock filed documents with the SEC to register to buy bitcoin ETF for its Global Allocation Fund. A move that is said to further emphasize BlackRock’s goal of integrating bitcoin into its mainstream investment portfolios.
“The crypto world is gradually moving towards greater institutionalization, as traditional financial players enter the market,” said Deutsche Bank analyst Marion Laboure.
According to digital currency trading data from The Block, investors in Asia are the driving force behind bitcoin’s recent strong upswing, accounting for nearly 70% of bitcoin trading volume, almost identical to 2021 as the currency hits historic highs.
Asia accounted for $791 billion of the $1,170 billion worth of bitcoin traded in February, far ahead of investors in North America with $113 billion in trading volume.
According to digital currency trading data from The Block, investors in Asia are the driving force behind bitcoin’s recent strong upswing, accounting for nearly 70% of Bitcoin trading volume, almost identical to 2021 as the currency hits historic highs.
Asia accounted for $791 billion of the $1,170 billion worth of bitcoin traded in February, far ahead of investors in North America with $113 billion in trading volume.
In China, FOMO (Fear of Missing Out) has overpowered retail investors who are frustrated with the gloomy stock market. On the country’s popular messaging app WeChat, searches for the term “bitcoin” increased 12-fold in February.
The legality of trading and owning bitcoins in Asian countries varies. While Japan has fairly liberal regulations in this area, China prohibits Bitcoin trading. South Korea says no to spot bitcoin ETFs, but domestic brokers still have ways for investors to access futures bitcoin ETFs.
South Koreans have invested a net $23.4 million in the US 2X Bitcoin Strategy ETF this year, nearly as much as $25.1 million in all of 2023, according to the Korea Depository. In February, this country’s traders also invested $6.89 million in the Proshares Bitcoin Strategy ETF.
Meanwhile, Hong Kong (China) legalized cryptocurrency trading activities last year. Hong Kong’s largest Bitcoin futures ETF has seen its assets under management increase fivefold in the past five months to more than $100 million.