A JPMorgan analyst reported on March 15 that Bitcoin has overtaken gold in investor portfolios, considering volatility adjustments, with Bitcoin’s allocation now 3.7 times that of gold.
This change is underscored by a $9 billion net inflow into Bitcoin ETFs, which offsets outflows from Grayscale.
Nikolaos Panigirtzoglou, a managing director at JPMorgan, shared in a recent X post that Bitcoin’s adjusted allocation exceeds gold by a significant margin.
He noted that since the approval of spot Bitcoin ETFs in January, over $10 billion has flowed into these funds. Panigirtzoglou suggested that the potential market size for BTC ETFs could reach $62 billion, using gold as a reference point.
Further, JPM Securities anticipates the spot Bitcoin ETF market could expand to $220 billion in the next two to three years, significantly impacting Bitcoin’s price due to increased capital inflows.
This optimism follows a nearly 40% increase in the crypto market’s total capitalization to $2.2 trillion, with Bitcoin and Ethereum experiencing 45% and 47% increases, respectively.
The growth has also benefitted altcoins, the DeFi sector, and NFTs.
Spot Bitcoin ETFs saw net sales soar to $6.1 billion in February from $1.5 billion in January.
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During the same period, Bitcoin’s price spiked by 31%, reaching an all-time high of over $73,800.
This surge coincided with inflows into spot BTC ETFs, with crypto mining stocks also hitting new highs.
JPMorgan analysts noted that only 7% of the $3.3 trillion invested in gold is held in funds, with the remainder in physical forms.
By applying a volatility ratio of 3.7, they project the spot BTC ETF market could potentially reach $62 billion in the next few years, indicating a shift from other investments to ETFs.
Spot Bitcoin ETFs have attracted $19 billion in cumulative inflows since their inception, excluding Grayscale Bitcoin Trust.
With a $10 billion outflow from GBTC, the net inflows stand at $9 billion. February saw spot BTC ETF net sales jump to $6.1 billion, with the largest daily inflows exceeding $1 billion on March 12.
As the Bitcoin halving approaches, the market anticipates increased demand and a potential supply crisis. Ki Young Ju, CEO of CryptoQuant, predicts this event will fuel demand further.
The approval of spot Bitcoin ETFs marks a turnaround for Bitcoin, pushing its price beyond previous highs and encouraging institutional adoption, notably by BlackRock.
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