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Bitcoin Can Compete With S&P 500 ETFs
At the Bitcoin Atlantis conference in Madeira, Portugal, Michael Saylor, president of MicroStrategy Inc. discussed Bitcoin and other topics with podcast host Natalie Brunell. One of the points of conversation was the recently approved Bitcoin spot exchange traded fund ETFs and their ability to compete with other leading asset classes and ETFs.
“We thought Bitcoin might be a competitor to gold, but it actually moved up the rankings, and now it’s starting to trail behind the S&P 500 Index ETFs,” Saylor said.
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Bitcoin and gold are viewed similarly by some investors because they are limited in supply and can be seen as a hedge against inflation. However, gold has been around for millennia, while Bitcoin is barely 15 years old. Bitcoin has quickly moved up the ranks and Saylor no longer sees gold as Bitcoin’s main competitor from an investment perspective.
Instead, Saylor believes that Bitcoin has the potential to compete with the world’s largest ETFs, namely S&P 500 index ETFs, such as SPDR S&P 500 ETF Trust (NYSE:TO SPY) And iShares Core S&P 500 ETF (NYSE:IVV).
In terms of market capitalization, the S&P 500 has a leg up on Bitcoin. Its market capitalization is greater than 40 trillion dollars, well above Bitcoin’s $1.3 trillion. However, according to Saylor, Bitcoin’s recent performance could be a sign that Bitcoin is ready to compete with some of the world’s biggest funds.
Spot Bitcoin ETFs launched less than two months ago but have already surpassed over $50 billion in combined total assets, according to Eric Balchunas, senior ETF analyst at Bloomberg. ETFs also saw a record amount of inflows in their first 30 days.
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“These ETFs have opened up a whole financial world of awareness, opportunity and functionality to 99% of traditional investors. You really can’t underestimate how deeply important this is to the entire network,” noted Saylor.
Saylor and Microstrategy are the largest institutional holders of Bitcoin, amassing a stash of 193,000 Bitcoins over the past few years. The overall investment has increased by over 100% and currently stands at over $13.5 billion.
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Despite this extremely successful investment, Saylor doesn’t see the company selling anytime soon. Asked about a potential exit strategy, Saylor replied: “Bitcoin is the exit strategy“.
Not only does Saylor not see an exit in the near future, but he is also going into debt to buy more Bitcoin. MicroStrategy recently sold $700 million in convertible senior notes to buy even more Bitcoin.
As Bitcoin and spot ETFs continue to perform well and see more investment, it will be interesting to see how this plays out. Will Bitcoin ETFs catch up with the S&P 500 ETFs? Only time will tell.
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This item Michael Saylor: Bitcoin can compete with S&P 500 ETFs originally appeared on Benzinga.com
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