According to Bloomberg Intelligence analyst Jamie Coutts, specialized trading tactics might cause some funds’ assets under management to skyrocket as the entire market capitalization of the cryptocurrency industry continues to soar, perhaps reaching $10 trillion.
After beginning the year with a market cap of $800 billion, the cryptocurrency space has since recovered from a bear market that saw the price of Bitcoin, the flagship cryptocurrency, fall from an all-time high of $69,000 to a low of approximately $16,000. Currently, the market cap of the space is $1.4 trillion.
Analysts predict that the prospect of a U.S.-listed spot Bitcoin exchange-traded fund (ETF) has contributed to the cryptocurrency market’s recent recovery, which has led to Bitcoin’s current price of $36,500. A race to list such a fund has begun, and major financial powerhouses are already making moves into the Bitcoin and cryptocurrency industry. These powerhouses oversee an incredible $27 trillion total.
By applying for a spot Bitcoin exchange-traded fund on June 16, the biggest asset manager in the world, BlackRock, seemed to kick off a chain reaction as its competitors hurried to do the same.
It should be noted that the $27 trillion number reflects the overall assets under management across the above organizations; it is projected that just a tiny fraction of this enormous value will be allocated to cryptocurrency investments.
In an additional post, Coutts stated his belief that the recent price increases in the cryptocurrency market are not due solely to the speculation about a possible spot Bitcoin ETF. He went on to say that during the first quarter of this year, Bitcoin was “sending the most obvious of singlas that the very nature of the allocation of assets was changing.”
In the first quarter, a Bloomberg expert said, “The spread between Bitcoin’s risk-adjusted return and global assets has widened since 2013, but it has turned around in the last three years, or the last BTC cycle.”
Notably, after a 35% increase in the value of the cryptocurrency over the previous 30 days, Bitcoin whales have been reaping gains over the past week by dispersing over 60,000 BTC, which is worth roughly $2.22 billion.
After US Department of Labor data showed that inflation pressures eased last month, causing core consumer prices—which do not include food and energy—to drop to their lowest level in two years and casting doubt on the Federal Reserve’s plans to raise interest rates soon, the price of Bitcoin briefly fell below the $36,000 mark.
Consumer prices in October were 3.2%, down from 3.7% in September and below market expectations of 3.3%, according to the Labor Department. After falling from 0.4% in September and 0.6% in August, inflation remained flat in October as compared to the prior month.
The slower-than-expected core inflation rate of 4.0% was the worst seen since 2021, and the 0.2% monthly rise was in line with predictions made by experts. The stock market benchmark index, the S&P 500, jumped sharply in response to the data.