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 <p class="is-style-lead">CoinShares, a prominent asset management firm, has identified Bitcoin as a key strategic asset for managing exposure in <a rel="dofollow" title="investment" href="https://thebittimes.com/tag/investment.html">investment</a> <a rel="dofollow" title="portfolios" href="https://thebittimes.com/tag/portfolios.html">portfolios</a>.</p> 
 <p>The latest recommendation comes amidst a notable surge in inflows into digital asset investment products, which have reached a staggering $1.7 billion over the last nine weeks, marking the largest increase since late 2021.</p> 
 <p>Bitcoin (BTC), the leading cryptocurrency, has been at the forefront of this influx, attracting over $1 billion in the past month alone, culminating in a total of $1.6 billion year-to-date. Ethereum (ETH) also witnessed a substantial inflow of $126 million, indicating a notable shift in investor sentiment.</p> 
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 <p>Despite Bitcoin’s reputation for delivering substantial <a rel="dofollow" title="returns" href="https://thebittimes.com/tag/returns.html">returns</a>, it is often viewed as a high-risk addition to traditional stock and bond <a rel="dofollow" title="portfolios" href="https://thebittimes.com/tag/portfolios.html">portfolios</a> due to its volatility.</p> 
 <p>However, CoinShares’ latest report presents a different perspective, suggesting that even minimal allocations of Bitcoin can have a disproportionately positive effect on the risk-adjusted returns and diversification of a balanced investment portfolio.</p> 
 <p>The research further highlights Bitcoin’s unique position as an alternative <a rel="dofollow" title="investment" href="https://thebittimes.com/tag/investment.html">investment</a>, primarily due to its low correlation with traditional assets. This characteristic enables it to act as a hedge against economic cycles.</p> 
 <p>CoinShares also notes that regular rebalancing of Bitcoin allocations can effectively reduce volatility and enhance overall portfolio performance.</p> 
 <p>The value of Bitcoin recently experienced a decline of approximately 4% following a $4.3 billion settlement between Binance and the US Justice Department. However, it swiftly recovered, climbing to a value of $44,000.</p> 
 <p>CoinShares attributes this resilience to several factors, including the industry’s elimination of bad actors, signals from the Federal Reserve indicating a potential halt in interest rate hikes, and the anticipated approval of a spot Bitcoin ETF.</p> 
 <p>In addition to Bitcoin’s performance, the asset manager has observed a rare widening of contango in the futures market, a phenomenon not seen since 2018. This situation is interpreted as a strong, bullish indicator, with futures premiums reaching significant levels.</p> 
 <p>Ethereum, on the other hand, has been buoyed by consistent positive funding rates, high trading volumes and leverage, and a balanced long/short ratio of 0.97. The gradual increase in gas prices is also exerting upward pressure on Ethereum’s price, accentuating its deflationary nature and amplifying the impact of buying volume.</p> 
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<p>Source: <a rel="dofollow" target="_blank" href="https://thebittimes.com/small-btc-investments-boost-returns-and-diversify-portfolios-says-coinshares-tbt72892.html">https://thebittimes.com/small-btc-investments-boost-returns-and-diversify-portfolios-says-coinshares-tbt72892.html</a></p>

Small BTC investments boost returns and diversify portfolios, says CoinShares

TheBitTimes

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