In the midst of recent turmoil in the cryptocurrency market, which was triggered by the simultaneous collapse of several crypto-oriented banks in the United States, bitcoin funds have experienced a significant decline in their asset holdings.
As a result, the total amount of BTC held by these funds in Canada has plummeted to its lowest point in seventeen months, with a decrease of 16,560 BTC (equivalent to approximately $409 million) in March, bringing their total holdings down to 826,113 BTC.
The experts of the company have stated that the depletion of funds was a direct result of the lack of interest from institutional investors during the recent Bitcoin price surge.
The surge was caused by the demand for safe assets amidst a banking crisis and hopes for a rate cut by the Federal Reserve System.
Charlie Morris, the investment director of ByteTree Asset Management, has pointed out that despite the appeal of BTC as a financial instrument, the industry of money management and risk hedging using Bitcoin and gold is still underdeveloped worldwide.
According to Morris, institutional investors do not consider BTC as a long-term asset and do not believe it will stay with them forever.
Markus Thielen, the head of research platform Matrixport, shared Morris’s views but cautioned crypto investors against jumping to conclusions.
Thielen noted that the decline in cryptocurrency holdings of funds reflects only a fraction of the entire market, and other sources show an increase in demand for BTC.
Morgan Stanley, one of the world’s largest investment holdings, confirmed the observations of ByteTree and Matrixport experts.
However, they stated that BTC is not typically regarded as a tool for long-term accumulation and is instead traded as a speculative asset.
In conclusion, institutional investors’ lack of interest in Bitcoin is due to the underdeveloped industry of money management and risk hedging using Bitcoin and gold.
While some experts warn against premature conclusions, others point out that BTC is not typically considered a long-term asset and is instead viewed as a speculative asset.