BBVA Executive Argues Allocation of Cryptocurrencies Could Amplify Portfolio Performance
Summary:
Philippe Meyer, the head of digital and blockchain solutions at BBVA, argues that incorporating Bitcoin and Ether, the two largest cryptocurrencies, into conventional investment portfolios could significantly enhance their overall performance. Meyer suggests that a 3-5% allocation of cryptocurrencies can considerably boost investor yield. His comments come amidst a crypto bull cycle, with Bitcoin price increases notably outperforming the S&P 500. However, the price of Bitcoin is currently experiencing a correction due to a slowdown in inflows from U.S. Bitcoin exchange-traded funds (ETFs). Farside Investors data shows these funds have seen large outflows due to investors selling below their initial cost basis.
Integrating Bitcoin and Ether, two of the leading cryptocurrencies, into conventional investment portfolios can significantly elevate returns, Philippe Meyer, head of digital and blockchain solutions at BBVA, has claimed. Meyer suggested during a Web3 Corporate Innovation Day panel that the inclusion of a small dose of digital currencies like Bitcoin and Ethereum can notably augment portfolio performance, emphasizing that allocating 3-5% of assets under management to cryptocurrencies can meaningfully escalate investor yield. His comments parallel the ongoing cryptocurrency bullish cycle, with Bitcoin valuing over the $65,383 mark and augmenting by over 146% within the last year as per CoinMarketCap data.
Bitcoin's performance in 2024 has notably overshadowed the S&P 500's, tripling the return of this key index which tracks the outcomes of the 500 largest publicly traded companies. With Bitcoin value rising by over 47% since the onset of the year compared to the S&P 500's growth of 15%, the cryptocurrency has superseded the index more than three times over, as per TradingView data. However, Bitcoin has lost some initial momentum in the short term, dropping by 2.3% during the month, while the S&P 500 has grown by 2.8%.
Currently, Bitcoin's worth is waning, apparent by a slowdown in inflows from United States spot Bitcoin exchange-traded funds (ETFs). The U.S. Bitcoin ETFs recently ended a 20-day streak of net positive inflows, registering three days of negative outflows. Over $145 million were reported as outflows from these ETFs on June 17 as per Farside Investors. Jag Kooner, head of derivatives at Bitfinex, attributes these outflows to ETF investor's lack of determination and consequent selling below their original cost basis. This tendency among ETF investors might also explain the significant outflows when range lows approached $60,000, following net inflows exceeding $1 billion on Bitcoin range highs of over $70,000 in late April.
Published At
6/18/2024 4:00:22 PM
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