TL;DR
- Asset Managers & Bitcoin: Asset managers are increasingly investing in Bitcoin for portfolio diversification, with a rise in demand for structured products like Accumulators and FCNs.
- Bitcoin’s Price Surge: Bitcoin’s value recently surpassed $70,000, fueled by the London Stock Exchange’s announcement to launch ETNs for Bitcoin and Ethereum, with predictions of reaching the $100,000 mark.
- Strategies & LSE’s Plans: The QCP report outlines trading strategies based on the high Bitcoin Spot-Forward Basis and the use of Accumulators, while the London Stock Exchange plans to accept applications for crypto ETNs starting April 8.
Acknowledging the prospective advantages of Bitcoin as a means of diversifying portfolios, asset managers have been progressively augmenting their Bitcoin holdings. A recent communication from the cryptocurrency trading company QCP Capital disclosed that asset managers persist in enhancing their Bitcoin holdings for portfolio diversification.
Moreover, there has been a surge in requests for structured products like Accumulators and FCNs, indicating a robust desire to diversify investment portfolios using Bitcoin.
Bitcoin recently broke the $70,000 mark, spurred by the London Stock Exchange’s announcement of plans to launch Exchange-Traded Notes (ETNs) for Bitcoin and Ethereum in May. QCP anticipates that this leading digital currency will continue its upward trend, potentially breaking previous records and reaching the much-anticipated $100,000 milestone.
Despite the market’s inherent unpredictability, Bitcoin’s potential for returns that are not tied to traditional assets has made it an appealing option for managers. The future upward movement of Bitcoin may depend on wider macroeconomic factors.
Unless there is a major shift towards risk aversion in the market, many experts predict that Bitcoin’s next upward move is increasingly likely. In light of this, the QCP report suggests two trading strategies.
Predicting Bitcoin’s Next Upward Move
First, the Bitcoin Spot-Forward Basis is currently high, with the front-end yield surpassing 20%, providing a strategic market positioning opportunity. Second, the use of Accumulators, which enable investors to purchase Bitcoin at a lower price, could be beneficial in anticipation of expected interest from traditional financial institutions.
As of this writing, the premier cryptocurrency is trading at $70,584, a 5.12% increase in the last 24 hours. The cryptocurrency has risen nearly 9% over the past week and about 37% over the past month. It is just 4.6% short of its all-time high of $73,750, recorded on March 14.
The London Stock Exchange (LSE) has revealed its intention to launch exchange-traded notes (ETNs) for Bitcoin and Ethereum on May 28. This move is in line with the LSE’s earlier statement that it would start accepting crypto ETN applications in the second quarter of this year.
As per the LSE’s announcement, firms that wish to list their Bitcoin and Ethereum ETNs on the new market are invited to start submitting their applications from April 8. This marks a considerable advancement in the widespread acceptance of digital assets.
