Standard Chartered Analyst Predicts Retirement Fund Managers Will Flock to Bitcoin ETFs
Geoff Kendrick, Head of Crypto Research at Standard Chartered, recently shared his insights into the future of traditional finance and its intersection with the crypto sphere. Kendrick believes that traditional fund managers will turn to crypto investments due to their recent performance and the launch of new crypto-based products.
The Impact of Interest Rate Cuts on Bitcoin and Ethereum
Kendrick highlights that the US Federal Reserve’s indication of interest rate cuts in 2024 could decrease volatility, benefiting “long-duration assets like Bitcoin and Ethereum.” Despite inflation concerns, investors’ confidence in these cryptocurrencies has remained strong, resulting in their robust performance.
Bitcoin ETF Outflows and Stability
Initially, there were concerns about large outflows from Bitcoin ETFs negatively impacting the stability of the cryptocurrency’s price. However, Kendrick views this as a one-time occurrence primarily driven by FTX-related outflows. With these outflows resolved, he expects increased attractiveness of crypto-based investment products for traditional investors.
Shift from Traditional to Crypto-Based Funds
Kendrick anticipates a shift from traditional to crypto-based funds in the coming months. He specifically predicts retirement fund managers will allocate funds to recently launched ETFs. The positive sentiment surrounding ETFs and their significant inflows leads Kendrick to foresee $50 billion to $100 billion of net inflows by year-end.
Positive Outlook for Spot ETH ETFs Approval
Kendrick notes that Ethereum’s performance has defied expectations by remaining unaffected by poor Treasury yields. He expects the approval of spot Ether ETFs by the US Securities and Exchange Commission (SEC) in May, which could attract interest from the 401k market. Kendrick predicts a net inflow between $20 billion and $35 billion into spot Ether ETFs throughout 2024 if approved.
Normalization of the Crypto Market
Kendrick believes that the entrance of big institutions into the crypto space is a positive development. He sees traditional finance as here to stay and considers crypto-based ETFs as a means to normalize the crypto market. Exposing traditional investors to the crypto sphere is crucial for the evolution of both sectors.
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