"BlackRock sold, but a golden age?"...Bitcoin volatility, gap with gold narrowed to 7%

▲ BlackRock, Bitcoin (BTC)/ChatGPT generated image

BlackRock's fund outflows are reversing the market sentiment that had interpreted them solely as a bearish signal for Bitcoin (BTC). Despite the ETF selling pressure, volatility has decreased to a level close to that of gold, leading to analysis that Wall Street has begun to view Bitcoin not as a speculative asset but as a portfolio diversification tool.

According to the cryptocurrency media outlet U.Today on May 29 (local time), massive fund outflows continued for 9 consecutive trading days from US cryptocurrency funds. Before the start of trading on May 29, BlackRock additionally transferred 2,448 BTC, worth $180 million according to Arkham data, to Coinbase Prime.

According to the article, institutional investors are realizing profits from ETFs against the backdrop of the Federal Reserve's hawkish stance and a 5.20% yield on US Treasury bonds. However, this prolonged selling spree simultaneously revealed a structural change: Bitcoin's volatility has dropped to the level of gold, a defensive precious metal.

According to the latest data from Bloomberg Terminal, BlackRock's IBIT 60-day historical volatility fell to 34.177%. During the same period, the volatility of gold ETF GLD rose to 27.227% amidst geopolitical tensions, and the volatility gap between Bitcoin and the physical metal narrowed to a record low of 7%.

Eric Balchunas, a senior ETF analyst at Bloomberg, emphasized that this factor determines the long-term viability of cryptocurrencies but receives little attention in the media. Balchunas cited key executives in the ETF industry, explaining that large funds and financial advisors are not looking for tech-stock-like returns from Bitcoin, but rather gold-like performance for efficient portfolio diversification.

U.Today reported that high volatility had been a barrier to entry for conservative funds for years, but current statistics show that this barrier is disappearing. As of May 29, the total net assets of the 13 US spot Bitcoin ETFs are $94.25 billion, accounting for 6.45% of Bitcoin's total market capitalization, with BlackRock's IBIT managing $58.11 billion of this. Despite 9 consecutive days of outflows, the cumulative net inflow since its launch remains at $55.79 billion.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*