{"id":25072,"date":"2024-06-09T10:00:18","date_gmt":"2024-06-09T10:00:18","guid":{"rendered":"http:\/\/107425368"},"modified":"2024-06-09T10:00:18","modified_gmt":"2024-06-09T10:00:18","slug":"bitcoin-etfs-bring-in-a-new-investor-who-bucks-the-hodl-culture-and-rebalances-as-bitcoin-soars","status":"publish","type":"post","link":"https:\/\/wp.worldtechguide.net\/bitcoin-etfs-bring-in-a-new-investor-who-bucks-the-hodl-culture-and-rebalances-as-bitcoin-soars\/","title":{"rendered":"Bitcoin ETFs bring in a new investor who bucks the &#8216;HODL&#8217; culture and rebalances as bitcoin soars"},"content":{"rendered":"<div><img decoding=\"async\" src=\"https:\/\/wp.worldtechguide.net\/wp-content\/uploads\/2024\/06\/bitcoin-etfs-bring-in-a-new-investor-who-bucks-the-hodl-culture-and-rebalances-as-bitcoin-soars.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<p><span class=\"HighlightShare-hidden\"><\/span><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-106984655\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Vertigo3d | iStock | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Crypto&#8217;s culture encourages investors to &#8220;HODL,&#8221; or hold on for dear life, in the rollercoaster ride of <span class=\"QuoteInBody-quoteNameContainer\" data-test=\"QuoteInBody\" id=\"SpecialReportArticle-QuoteInBody-1\"><span class=\"waslinkname\">bitcoin<\/span><span class=\"QuoteInBody-inlineButton\"><span class=\"AddToWatchlistButton-watchlistContainer\" id=\"-WatchlistDropdown\" data-analytics-id=\"-WatchlistDropdown\"><button class=\"AddToWatchlistButton-watchlistButton\" aria-label=\"Add To Watchlist\" data-testid=\"dropdown-btn\"><span class=\"AddToWatchlistButton-addWatchListFromTag\"><\/span><\/button><\/span><\/span><\/span>&#8216;s extreme fluctuations.<\/p>\n<p>But this long-prized practice may diminish as adoption of ETFs grows, <span class=\"waslinkname\">particularly if traditional investors<\/span> who are accustomed to rebalancing their portfolios regularly add in bitcoin exposure.<\/p>\n<p>The cryptocurrency has become increasingly institutionalized in recent years and since the launch of exchange traded funds this year that track bitcoin&#8217;s price, that trend is expected to increase \u2013 especially as different wirehouses, brokerages, <span class=\"waslinkname\">and advisors<\/span> start to turn on client access to the ETFs.<\/p>\n<p>&#8220;You have so many people in this community who are just diamond-handed holders,&#8221; Donald Marron,&nbsp;director of economic policy initiatives at Urban Institute, said this week at the 2024 Vision conference in Austin, Texas. &#8220;If you convince them to allocate 1% [to bitcoin] today \u2026 and never touch it, they would see enormous wealth gains if you were on those roads to a much higher bitcoin price.&#8221;<\/p>\n<p>&#8220;If you have people who are actually doing what I view as traditional asset allocation, they&#8217;re going to face a question every quarter, every month, every year about whether they rebalance,&#8221; he added. &#8220;From a risk management point of view, rebalancing is a good thing. But rebalancing also means that they&#8217;re going to be sellers along this journey.&#8221;<\/p>\n<p>At some point, every <span class=\"waslinkname\">HODLer<\/span> becomes a seller, according to Julio Moreno, head of research at CryptoQuant. At the moment, long-term holders are selling, as is normal during bull markets, after accumulating bitcoin during the bear market.<\/p>\n<\/div>\n<div class=\"group\">\n<p>Matt Hougan, chief investment officer at Bitwise Asset Management, the issuer of the <span class=\"waslinkname\">Bitwise Bitcoin ETF (BITB)<\/span>, said investors should treat bitcoin &#8220;like any other asset \u2026 add it into a portfolio and include the rebalancing process&#8221; \u2013 pointing to bitcoin&#8217;s traditional four-year cycle of three good years followed by a down year.<\/p>\n<p>&#8220;Bitcoin has has boom and bust cycles,&#8221; he said, speaking at the Vision conference, a crypto investing forum for advisors hosted by the Digital Assets Council of Financial Professionals. &#8220;When you add rebalancing to your portfolio, the impact on &#8216;sharpes&#8217; and other measures increases dramatically.&#8221;<\/p>\n<p>Sharpe ratios help investors assess the return they get from an investment relative to the amount of risk they take.<\/p>\n<p>Rebalancing may help dampen bitcoin&#8217;s notorious volatility \u2013 one of the biggest things keeping many investors away from the asset, according to Michael Allegue, an investment officer at MassMutual.<\/p>\n<p>&#8220;As more and more institutional capital comes in, there&#8217;s potential for volatility dampening as many other firms, us included, are probably going to be rebalancing accounts \u2013 they&#8217;re not going to be purely buy-and-hold,&#8221; Allegue said.<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"SpecialReportArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Don&#8217;t miss these stories from CNBC PRO: <\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Vertigo3d | iStock | Getty Images Crypto&#8217;s culture encourages investors to &#8220;HODL,&#8221; or hold on for dear life, in the rollercoaster ride of bitcoin&#8216;s extreme fluctuations. But this long-prized practice may diminish as adoption of ETFs grows, particularly if traditional investors who are accustomed to rebalancing their portfolios regularly add in bitcoin exposure. The cryptocurrency &hellip;<\/p>\n","protected":false},"author":1,"featured_media":25073,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"hashtags":[],"class_list":["post-25072","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","has-thumb","has-featured"],"_links":{"self":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/25072"}],"collection":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/comments?post=25072"}],"version-history":[{"count":0,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/posts\/25072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media\/25073"}],"wp:attachment":[{"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/media?parent=25072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/categories?post=25072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/tags?post=25072"},{"taxonomy":"hashtags","embeddable":true,"href":"https:\/\/wp.worldtechguide.net\/wp-json\/wp\/v2\/hashtags?post=25072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}