Bitcoin is undergoing a significant transformation, and passive flows from large institutions could be the driver of its mass adoption.
Today we will delve into the world of Bitcoin, but I will particularly address those who still doubt its relevance. In the past, many viewed Bitcoin as something for young people, retail investors, pioneers, and freedom lovers. However, things have changed dramatically and will continue to change in the coming years.
For those who still doubt the importance of Bitcoin, I would like you to reflect on Larry Fink. Larry Fink is not only the CEO of BlackRock, but also a key figure at the World Economic Forum and the Davos summits. BlackRock, as we know, is a major fund manager that invests in companies around the world. Do you really think that Larry Fink will decide to launch a Cryptocurrency ETF just because Bitcoin has started an uptrend? As a speculator and observer I can say that it is not that simple, so why launch an ETF that invests in spot Bitcoin?
The answer is clear: institutional investors asked for it. They asked for an investment vehicle that would allow them to channel part of their wealth into Bitcoin in a simple and accessible way. This gives Bitcoin legitimacy as an institutional asset. Think of pension funds or insurance companies that have huge resources.
If we consider Bitcoin as an institutional asset, don’t you think that these large institutions could decide to invest a small percentage of their assets in Bitcoin? It wouldn’t be surprising. The legitimacy that these large fund managers are giving to Bitcoin by launching a spot Bitcoin ETF could further accentuate Bitcoin’s upward trend.
It is crucial to understand that these institutions, although Bitcoin is volatile, are not affected in the same way as retail investors. They invest only a small percentage of their assets and on a long-term basis, with investment horizons of at least 5 years. The argument of Bitcoin volatility as an obstacle holds no weight in this context.
The ETF to be launched by these managers could be of great interest to them and Bitcoin could receive a further boost thanks to inflows from these companies.
Now, an interesting fact that reinforces my belief that Bitcoin will become an institutional asset is the changing narrative. We have moved from viewing Bitcoin miners as major polluters to recognizing that they contribute to renewable energy development and climate action. This change in narrative is an important signal.
In short, Bitcoin is undergoing a significant transformation and passive flows from large institutions could be the driver of its mass adoption. Furthermore, the change in the public narrative around Bitcoin reflects an evolution in general perception. Bitcoin’s future as an institutional asset seems more solid than ever.
Original article published on Money.it Italy 2023-12-01 06:50:00. Original title: Come il Bitcoin è diventato un asset istituzionale
