Bitcoin overtakes gold in investor portfolio allocation: JPMorgan

Bitcoin’s allocation in investor portfolios has reached 3.7 times that of gold when adjusted for volatility, said a JPMorgan analyst.

Bitcoin (BTC) has now overtaken gold in investor portfolio allocation when adjusted for volatility, according to a JP Morgan analyst 

JPMorgan managing director Nikolaos Panigirtzoglou reportedly said that, when adjusting for volatility, Bitcoin’s allocation in investor portfolios is 3.7 times greater than the bullion.

The analyst highlighted the significant inflow of over $10 billion into Bitcoin exchange-traded funds (ETFs) since its inception in January earlier this year and claimed the potential Bitcoin ETF market size could reach $62 billion using gold as a benchmark. 

Another report from JPM Securities predict that spot Bitcoin ETFs market could grow as large as $220 billion in next two to three years. 

“We estimate $220B of incremental flows will come into the ETFs over the next three years, which could also be quite impactful to Bitcoin’s price given the multiplier on capital,” analysts led by Devin Ryan wrote.

Bitcoin ETFs have proven to be a net positive for the crypto market, and the world’s largest cryptocurrency has gained over 45% in market cap in February. Net sales for spot Bitcoin ETFs climbed to $6.1 billion in February, compared to $1.5 billion in January.

The largest daily inflow for spot ETF peaked at over a billion dollars on March 12, while analysts believe this number would go further up after GBTC’s outflows stop.

With Bitcoin halving just over a month away, the supply of daily BTC would be cut down in half, which could fuel the demand further and lead to a supply crisis within the next six months, predicted Ki Young Ju, the CEO of crypto analytic firm CryptoQuant.

After a prolonged crypto winter lasting nearly three years, spot Bitcoin ETF approval became a catalyst for BTC’s mammoth price action that has pushed it past the last bull cycle’s all-time-high of above $69,000, as well as institutional adoption led by the world’s largest asset manager in BlackRock.

The top nine ETFs out of 11 approved have racked up hundreds of millions of dollars in net inflow despite millions in outflow from Grayscale’s GBTC ETF.