Do Traditional Investors See Bitcoin as Risk Asset? By U.Today
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
- Bitcoin and Gold:
- Demand for Bitcoin has increased while gold ETFs experienced outflows of $7.7 billion, despite gold reaching an all-time high.
- Outflows from gold ETFs began in April 2022 and continued consistently, totaling $46 billion over the period.
- The trend challenges the idea that Bitcoin's rise caused a decline in gold investor interest, as outflows started before significant Bitcoin ETF launches.
- Venture Capital Investment in Crypto Sector:
- In Q1 2024, venture capitalists invested $2.49 billion in crypto and blockchain-focused companies through 603 deals, marking a significant increase.
- Despite Bitcoin's price rise, VC activity did not surge proportionally, possibly due to industry-specific catalysts and broader macroeconomic factors.
- BTC as Risk-Off Asset:
- Bitcoin's decentralization mitigates systemic risks associated with traditional financial systems, operating as a single institution governed by a global network of peers.
- Its volatility is tied to its monetary policy, prioritizing supply growth over price stability, leading to price fluctuations driven by demand.
- Bitcoin has shown resilience across different interest rate and economic environments, consistently performing well during risk-off periods over the past decade.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
