Bitcoin, once known for its extreme price swings, is now seeing a decrease in volatility. Matt Hougan, chief investment officer at Bitwise Asset Management, has noted that the wild fluctuations in the cryptocurrency’s value have subsided over the past decade. This shift is attributed to a simple demand-supply imbalance in the market, driven by the influx of new demand from ETFs and limited supply.
The introduction of bitcoin exchange-traded funds (ETFs) in January marked a turning point for the cryptocurrency. Since then, the price of bitcoin has surged by more than 50%, hitting an all-time high of nearly $74,000. While some see bitcoin as a lucrative investment opportunity, others find its volatile nature hard to grasp. Despite the optimism surrounding bitcoin, ProShares has also launched a Short Bitcoin Strategy ETF, capitalizing on potential losses in the market.
Simeon Hyman, global investment strategist at ProShares, remains optimistic about bitcoin’s long-term prospects. He points to the cryptocurrency’s resilience in the face of market turbulence, citing its historical performance as a store of value. Hyman emphasizes the importance of asset allocation and diversification, attracting new investors to the digital asset space.
ProShares manages both a Short Bitcoin Strategy ETF and a Bitcoin Strategy ETF, catering to investors with varying risk appetites. While the former has experienced sharp declines, the latter has seen impressive gains in recent months. The Long Bitcoin Strategy ETF has surged by 55% since the beginning of the year and by 111% over the past year, showcasing the potential for significant returns in the digital asset market.
As of the latest data, bitcoin has appreciated by 180% over the past 12 months, indicating sustained investor interest in the cryptocurrency. Despite its turbulent past, bitcoin continues to attract both retail and institutional investors looking to diversify their portfolios. The evolution of bitcoin as a legitimate investment vehicle reflects the broader trend towards digital assets in the financial landscape.