Bitcoin ETF Research: BTC Should Match Gold in Investment Portfolios

According to PANews, a research report on Bitcoin ETFs led by Nikolaos Panigirtzoglou and his team of analysts at JPMorgan was released this week. The report states that risk is often overlooked as a key factor and that Bitcoin should be matched with gold in investment portfolios. It highlights that the total value of gold held for financial investment purposes is currently $3.3 trillion. If Bitcoin's market value were to rise to the same level, its price would more than double. The report points out that most investors consider risk and volatility when allocating assets across different classes. Bitcoin's volatility is about 3.7 times that of gold, making it unrealistic to expect Bitcoin to reach a nominal amount in investment portfolios comparable to gold (i.e., a market value of $3.3 trillion). If Bitcoin were to match gold in risk investments, the reasonable market value should be $890 billion, calculated by dividing the $3.3 trillion market value by 3.7. The analysts state, "This means that the (reasonable) price of Bitcoin is 45,000 USDT, far below the current level. In other words, at the current price of 66,000 USDT, the allocation of Bitcoin in investors' portfolios has already exceeded the gold adjusted for volatility." The inflow of funds into ETFs is expected to be $62 billion. Of the $3.3 trillion in gold held for financial investment purposes, only 7% is held in the form of funds, amounting to about $230 billion, with the rest stored in the form of bars and coins. Therefore, using the same volatility ratio of 3.7, the reasonable size of a Bitcoin ETF is about $62 billion. This is also the potential target upper limit for Bitcoin ETFs, which may be achieved within two to three years. However, a significant portion of the net inflows may come from the continuous rotation and transfer of existing investment tools to ETFs. Farside Investors data shows that as of 15:00 on March 8, the cumulative net inflow since the approval of the Bitcoin spot ETF is $93.7 billion. If the same pace is maintained, JPMorgan's predicted upper limit will be reached by May this year.

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