Bitcoin swings are becoming more intense following the digital asset’s run to a record high, and a key question now is how investors in US exchange-traded funds holding the cryptocurrency will react.
The T3 Bitcoin Volatility Index, which uses options prices to give a sense of expected 30-day swings in the token, has jumped to the highest level since the aftermath of the collapse of Sam Bankman-Fried’s FTX exchange. The spike suggests the crypto market should brace for more bitcoin gyrations.
A net $8.9 billion has poured into US spot-bitcoin ETFs since they went live on Jan. 11, catalyzing the digital asset’s surge to a peak above $69,000 on Tuesday. The token quickly reversed from the high, leading to an intraday swing of more than 14 percentage points, while Wednesday’s range was 8 percentage points. Such moves could conceivably make some ETF investors queasy.
“Hopefully, they were all warned this could happen, but even so, it was probably startling to many and unfortunately perhaps devastating to a few,” wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter. “If yesterday’s moves permanently scared away many who do not want this kind of action in their portfolios, then that is good news for them and for the market.”
Nine spot-bitcoin ETFs that debuted early January, including offerings from BlackRock Inc. and Fidelity Investments, wooed a record net inflow of nearly $1 billion on Tuesday despite that session’s volatility, according to Bloomberg Intelligence.
This suggests “bitcoin ETF investors will likely be among the asset’s strongest hands and unlikely to run for the exits during drawdowns,” Bloomberg Intelligence analysts Eric Balchunas and Athanasios Psarofagis wrote in a note.
The ETFs are being used as a small “hot sauce” allocation to core portfolios, meaning investors will have a greater tolerance for volatility, they said. Cathie Wood’s ARK Innovation ETF displayed a similar dynamic, the analysts added.
Bitcoin changed hands at $65,800 as of 1:51 p.m. Thursday in Singapore as speculators paused for breath after a tumultuous stretch of trading.
While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.
New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.
With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.
A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.
"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
