In terms of investor portfolio allocation, bitcoin has surpassed gold.
This achievement demonstrates how successful Bitcoin ETFs have been.
But the price of Bitcoin fell sharply.
JPMorgan analysts observed a surprising trend: investors are allocating more Bitcoin (BTC) to their portfolios than gold, highlighting increased volatility in the traditional safe-haven asset. In particular, the allocation of Bitcoin is 3.7 times more than that of gold. Additionally, they noted that since the start of Bitcoin ETFs, there has been a net inflow of $9 billion into them, offsetting outflows from Grayscale.
Bitcoin Overtakes Gold to Reach Milestone
JPMorgan sees a big opportunity in Bitcoin ETFs. Their statement suggests the Bitcoin ETF market could reach a value of $62 billion, using gold as a benchmark. In addition, February was an exceptionally bullish month for the cryptocurrency industry, with its entire market value rising to $2.2 trillion, a roughly 40% month-over-month increase. The main drivers of this spike were a boost of 47% in Ethereum and 45% in Bitcoin.
Despite their weaker performance, altcoins saw double-digit gains. Moreover, this rally saw advances for the non-fungible token (NFT) and decentralized finance (DeFi) sectors. Additionally, Spot Bitcoin ETF net sales increased to $6.1 billion in February from $1.5 billion in January.
In addition, the value of Bitcoin on the cryptocurrency market increased by 31% in just one month, hitting a record high of approximately $73,800. Significant inflows into Spot Bitcoin ETFs accompanied this surge. In a similar vein, February saw record highs for stocks involved in cryptocurrency mining.
Bitcoin Price Drops
But today, the price of Bitcoin fell significantly after reaching its peak observed by JPMorgan Analysts. On Friday, March 15, at the time of writing, Bitcoin fell 5.86% to $68,105.40, yet its market valuation remained at $1.33 trillion. Fascinatingly, the 24-hour volume of Bitcoin trades increased to $85.95 billion, a 91.58% increase.
The recent decline in Bitcoin’s price is being blamed on a surge in inflation rates, as evidenced by the rising US Producer Price Index (PPI). The PPI, which considers how much raw material costs affect selling prices, increased by 0.6% in February compared to the 0.3% increase predicted. The Federal Reserve will probably be paying careful heed to the unanticipated spike in inflation during their meeting in March.
Coinglass data reveals a total liquidation of $270.69 million, with long positions accounting for a significant portion ($207.44 million) on the prior day. This heavy selling pressure is believed to be a contributing factor to the recent decline in Bitcoin’s price. The substantial liquidation further depresses the value of Bitcoin.
