A fringe economic phenomenon that drives the price of Bitcoin to the million dollar dream! By Investing.com

Investing.com – Over time, its unique characteristics, which differentiate it from any other asset in the world, are increasingly recognized by investors. The recent approval of Bitcoin-linked exchange-traded funds (ETFs) will reinforce this understanding, as these funds simplify the process for investors to gain exposure to Bitcoin.

Get Strong Bitcoin Gains from Tech Stocks with InvestingPro’s Tech Whales Investment List

Subscribe now at a discounted rate and get access to ProPicks investment lists, fair values ​​for all stocks and tons of unique historical data

Changing investment landscape thanks to ETFs

Accreditation by Bitcoin ETFs is an unofficial stamp of legitimacy that indicates Bitcoin is here to stay. However, there is another important dimension to consider. If this dimension is fully understood, it will be clear that Bitcoin is capable of reaching the desired million price.

Understand the current situation

It has revolutionized how ordinary or retail investors can add Bitcoin exposure to their portfolios by agreeing to ETFs. By purchasing shares through their brokerage in one of these funds, investors can now avoid the hassles of trading on exchanges and managing digital portfolios.

This development has the potential to dramatically increase demand for Bitcoin’s limited and dwindling supply. However, this increased access to retail investors pales in comparison to the expected wave of demand from institutional investors entering the market.

Who are institutional investors?

For a long time, I heard Bitcoin enthusiasts saying that companies were coming, but I didn’t understand what it was. Institutional investors are companies that invest money on behalf of their clients. These institutions include pension funds, pension plans, sovereign wealth funds and hedge funds. Essentially, they manage and invest large sums of money.

See also  U.S. stocks fall after today's data...and stocks rise strongly beyond meat. By Investing.com

Before Bitcoin ETFs were approved, companies were either prohibited from entering or reluctant to enter the Bitcoin market due to complications in owning the digital asset. With the arrival of these funds, companies can now easily add Bitcoin to their larger portfolios, opening the door to the entry of significant institutional capital into the Bitcoin market.

Potential impact on organizations

But how influential are these companies? As of May 15, approximately 700 professional investment firms were estimated to hold approximately $5 billion worth of Bitcoin ETFs. Leading the way is Millennium Management, an investment firm with more than $64 billion under management, with $1.8 billion tied to bitcoin ETFs, 3% of its total portfolio.

Future calculations and their impact

Although individual investors are currently the primary owners of these funds, reports indicate that about 10% of all assets associated with these funds come from institutions. But this number is increasing.

Institutional entry into the Bitcoin market is expected to be gradual, with firms typically requiring a significant amount of time before committing funds. Unlike individual investors who can jump into the market quickly by buying shares of an ETF, companies take time to study the impact of Bitcoin on their portfolios before allocating small funds.

Theory in Action: Game Theory

We see the beginning of an amazing phenomenon: game theory. At its core, game theory proposes that rational actors, in this case institutional investors, will act strategically in their own interests based on the actions of others. As companies see their peers benefiting from Bitcoin investments, they face pressure to join the crowd or risk being left behind in the race for revenue.

See also  Hamas leader: Gallant is "selling illusions" to Israelis

The end result

Driven by the desire to outperform peers and maximize returns, this dynamic will drive Bitcoin adoption and investment like never before. While retail investors have played a large role in Bitcoin’s journey thus far, and will continue to play a major role, the entry of institutions represents a major shift. The scale and resources these companies possess will amplify the dynamics of the Bitcoin market and introduce a new level of competition and urgency.

As companies seek to profit from Bitcoin’s potential, the game will evolve in unexpected ways and push Bitcoin to new heights.

Use InvestingPro to succeed in the world of investing and maximize your financial gains! Now get extra 10% off when using code SAPRO2 (click code to get discount)

Not sure how to use the code? Click here and watch this video to explain all the steps

For any questions, please contact us Technical support from here

Leave a Reply

Your email address will not be published. Required fields are marked *