Jannat Ara

Bitcoin’s Safe-Haven Characteristics to Provide Robust Backing for Spot ETFs, Says Kaiko

Kaiko analysts suggest that Bitcoin’s distinctive features, such as asymmetric returns and low correlation with traditional assets, could offer substantial support for recently launched spot Bitcoin exchange-traded funds (ETFs).

The research report indicates that Bitcoin, outperforming conventional safe-haven assets like gold and bonds, has witnessed over $2 billion in net inflow since the introduction of spot ETFs on January 10. This surge signals a growing interest among investors in using Bitcoin as a safe-haven asset amid broader market uncertainties.

Kaiko highlights the decline in the 60-day correlation between Bitcoin and the Nasdaq 100 index over the past year, consistently hovering near zero since June 2023. The report emphasizes that Bitcoin stands out as a safe-haven due to its higher returns compared to traditional assets like gold, U.S. bonds, or the dollar.

The cryptocurrency’s appeal is further reinforced by its exceptional performance during the U.S. banking crisis in 2023, attracting significant “safe-haven flows.”

While gold prices rose by 15% in 2023, reaching a record annual close at $2,078 per ounce, Bitcoin achieved a remarkable gain of over 154%, contributing $530 billion to its market capitalization.

Despite Bitcoin’s solidification as a safe-haven asset, its current struggle to surpass the $40,000 threshold is attributed to consistent sales of Grayscale’s Bitcoin Trust (GBTC). Grayscale Investments reportedly sold over $2.14 billion in Bitcoin following the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission.

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