Popular crypto influencer Coin Bureau is unveiling three big reasons why the Bitcoin market still has room to grow much larger than the average investor realizes.
In a new video, the pseudonymous trader who goes by Guy first stresses that institutional adoption will act as much of the rocket fuel that takes Bitcoin into the stratosphere.
Guy takes note of the fact that Morgan Stanley and Goldman Sachs, two of the biggest financial institutions in the world, both became Bitcoin bulls after years of outspoken skepticism and bearishness. The analyst also believes that BlackRock, the world’s largest asset manager in the world with a whopping $7.3 trillion in assets under management (AUM), could be the next giant to send Bitcoin to the moon.
“I have a feeling that things are about to get interesting at BlackRock. As global macro investors, they cannot ignore the risk that is imposed by sustained and persistent inflation, inflation that the Fed seems happy to spur on. Can you imagine the implications for the Bitcoin market if BlackRock just decided to invest 1% of all its AUM into Bitcoin? That’s truly mind-blowing numbers there.”
Guy goes on to posit that if BlackRock starts seeing returns on Bitcoin, the rest of the trillion-dollar asset managers will have to join as well in order to compete, sending in tidal waves of institutional money to the flagship crypto asset.
Coin Bureau also predicts a reduction in Bitcoin’s volatility to act as a catalyst that could attract more institutional investors and encourage adoption. He notes that less volatility not only means less risk, but also lower spreads which are more cost-efficient for institutions who are often putting massive orders into the market.
“That’s perhaps one of the most important things to take from this is, is the fact that there has been a large reduction in the risk of holding Bitcoin, both from a historical and forward-looking perspective. So the market feels ripe for more institutional adoption.”
The third factor that Coin Bureau sees massively working out in Bitcoin’s favor is its decoupling from other asset classes such as equities and gold.
“Institutional investors are always trying to optimize their portfolios by finding assets that are uncorrelated with one another. Last year, during the pandemic market crash, Bitcoin fell just as quickly as equities. Correlation was high, as investors placed the asset into their risk buckets. Therefore, it was less enticing for some of the largest asset managers in search of diversification benefits. However, this correlation has been trending down over the first quarter of this year.
Bitcoin is acting as more of a hedge to the dollar than diversification. Therefore, if portfolio managers wanted to reduce their risk to a falling US dollar, Bitcoin should offset that as it is more likely to appreciate on these occasions. So it’s quite clear that Bitcoin is an attractive asset to HODL by these fund managers.”
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Featured Image: Shutterstock/PHOTOCREO Michal Bednarek
