The landscape of cryptocurrencies is changing dramatically
The landscape on cryptocurrencies is drastically changing, the value of which now exceeds 2.6 trillion. with large institutional “players,” such as well-known insurance funds, entering the digital assets market, according to Bank of America.
At the same time, strong winds are blowing from developments such as the installation of Bitcoin ATM in stores of the largest supermarket chain and US company, Walmart, but from the new ETF, which is traded on the New York Stock Exchange under the code name BITO.
So according to BofA, pension funds have increased their exposure to digital assets.
Particularly:
The Fairfax County Police Officers Retirement System and Fairfax County Employees’ Retirement System are seeking approval to invest $ 50 million in a mutual fund with direct exposure to digital assets after a combined investment of $ 73 million in 2018 and 2019 equity Morgan Creek Digital Assets.
- The Houston Firefighters Assistance and Retirement Fund has announced a $ 25 million investment in bitcoin and ether (Ethereum’s native token).
- Queensland Investment Corporation, Australia’s 5th largest pension fund, has expressed interest in digital assets.
- Korea Teacher’s Credit Union plans to invest in digital assets in 2022.
However, according to the American bank, the investment of pension funds in digital assets, in general, is in an exploratory stage.
The state pension funds in the US are extremely underfunded, with the non-financed liabilities at the end of 2019 reaching ~ 1.25 trillion. dollars, which led many to try to bridge the gap between the program’s assets and investment liabilities.
However, the pension funds worldwide held AUM (assets under management) 35 trillion. at the end of 2020, which means that if they increase their exposure to cryptocurrencies, a strong wind will blow in the market.
Walmart has set up a Bitcoin ATM
Walmart has added 200 Coinstar ATMs to US stores that shoppers can use to buy bitcoin in cash.
Coinstar plans to install a total of 8,000 ATMs across the United States.
According to BofA, Walmart has ~ 4,700 stores in the US, indicating that bitcoin kiosks are located in ~ 4% of US stores.
ATMs are nothing new – there are already ~ 26,000 of them in the US and ~ 30,000 worldwide.
And although their charges are high, their installation remains good news.
BITO: The first approved Bitcoin ETF in the US
As you know, ProShares Bitcoin Strategy ETF (BITO) is the first approved Bitcoin ETF in the US.
It has been trading on the New York Stock Exchange since last Tuesday.
According to BofA, this will pave the way for other ETFs of future performance and eventually for spot ETFs beyond Bitcoin.
What the streams say
The transparency provided by Blockchain technology provides a clear picture of the digital asset ecosystem that is not available in traditional financial markets.
But what can investment climate streams say about cryptocurrencies and NFTs?
According to BofA, investors generally prefer to hold tokens in their wallets and often carry them to exchanges (net outflow) when they intend to sell them, which can increase price pressures.
Particularly large inputs to exchanges can quickly put downward pressure and lead to extensive correction.
Instead, investors transfer tokens from exchanges when they intend to hold them (or hold them for a lifetime – HODL), raising prices.
What about Stablecoins
Stablecoins are digital assets linked to an asset, such as a fiat currency (eg the US dollar), a commodity (such as gold), other digital assets, or a combination of assets to maintain a fixed value.
Digital asset owners and traders use stablecoins to transfer funds, reduce exposure to more volatile digital assets without converting digital assets into fiat currency, “lock in” trading profits and as a safe haven if expected recession.
The existence of potential buying or selling pressure from stablecoin flows is inversely proportional to the way tokens flow.
Investors often transfer stablecoin from their personal wallets to exchanges (net outflow) when they intend to buy tokens, increasing market pressure.
Investors, on the other hand, transfer Stablecoins from exchanges to their personal wallets (net inflow) when they do not intend to buy tokens or after sales, increasing price pressures.
