As the S&P 500 experiences a major comeback, drawing significant investor interest, the contrasting performance of Bitcoin has become a cause for concern among market participants. Bitcoin, often touted as a digital gold and a hedge against traditional economic uncertainties, has demonstrated a divergent trajectory, prompting questions about its resilience in the face of broader market movements.
The S&P 500, representing a basket of leading U.S. stocks, has exhibited a robust resurgence, signaling a revival in investor confidence and an optimistic outlook for the broader economy. In stark contrast, Bitcoin, renowned for its volatility and often perceived as a store of value and alternative investment, has faced challenges that have raised eyebrows in the financial community.
Bitcoin has not picked after the ETF approval
Experts have observed that the Federal Open Market Committee (FOMC) is anticipated to maintain stable interest rates in light of the current economic climate. The scheduled dates for the meeting are January 30 and 31.
Reportedly, the Fed is maintaining the status quo in light of recent economic data that have exceeded expectations. Analysts at Bloomberg observe that attention is shifting to the FOMC’s March meeting and beyond, anticipating that policy easing will not begin until then.
Despite this, Wall Street had a positive week-end, as evidenced by the S&P 500 reaching a new all-time high on Friday. According to the Financial Times, this surge, which is especially evident in technology companies, has caused the primary US equity benchmark to surpass its previous apex from January 2022.
As of this writing, the current value of Bitcoin (BTC) is $41,723.05; this represents a 0.1% decrease from one hour ago and a 0.5% increase since the last day. BTC is currently worth 2.7% less than it did seven days ago. The 24-hour trading volume of Bitcoin amounted to $9,002,146,872.
Bitcoin ETFs amass 95,000 BTC
After six consecutive trading days, the nine spot Bitcoin exchange-traded funds (ETFs) that have been approved currently possess a combined holding of 95,000 BTC, with an approaching $4 billion in assets under management (AUM).
According to information released by senior ETF analyst Eric Balchunas at Bloomberg, the inflow of capital into the nine newly introduced ETFs has exceeded the outflows from the Grayscale Bitcoin Trust (GBTC). Over the past six days, GBTC has experienced a decline of $2.8 billion in its assets under management.
Fidelity’s (FBTC) and BlackRock’s iShares (IBIT) have emerged as the most prominent among the nine ETFs, garnering inflows exceeding $1.2 billion during the initial six days of trading. Despite Fidelity’s ETF receiving marginally higher inflows, BlackRock presently manages a marginally greater amount of assets under management, amounting to $1.4 billion as opposed to Fidelity’s roughly $1.3 billion.
Franklin Templeton CEO weighs in on BTC demand
Despite dubbing Bitcoin the greatest distraction from blockchain, which she described as one of the most significant upheavals in financial services, Franklin Templeton President and CEO Jenny Johnson said she remains committed. She told CNBC that:
A lot of people took that as I’m not a believer in Bitcoin […] And yet, launching this ETF, you can see, obviously, the demand that’s out there for Bitcoin, and I think there’s a lot of reasons why that is.Jenny Johnson
Johnson remarked that Franklin Templeton established a tokenized fund on the stellar blockchain in 2021, additional investment opportunities in addition to BTC. The investment firm referred to Bitcoin as merely one of several options. Franklin Templeton disclosed in an SEC filing that in the same year, its intention was to create a blockchain venture fund with an initial investment of $20 million.
With over $1.4 trillion under management at present, Franklin Templeton, a global investment firm founded in 1947, provides asset management and fund services to institutions and individuals.
Johnson, echoing recent comments by BlackRock CEO Larry Fink, stated that one reason for Bitcoin’s continued popularity is its ability to protect against oppressive governments. She stated that as she traveled the world, she heard stories of people keeping 50% of their savings in Bitcoin for fear of confiscating their fiat money for saying the wrong thing.