Shift To Crypto: 401K Market Poised To Enter Bitcoin ETFs, Standard Chartered Analyst Says

Geoff Kendrick, an analyst at Standard Chartered, has provided his perspective on the evolving landscape of traditional finance and its convergence with the cryptocurrency sphere, particularly following the introduction of spot Bitcoin Exchange-traded funds (ETFs) in the United States.

According to Kendrick, the recent performance of cryptocurrencies, coupled with the emergence of new crypto-based products, is expected to prompt traditional fund managers to explore investment opportunities in the crypto market.

Retirement Fund Managers Ready To Flock To Bitcoin ETFs

In an interview with Yahoo Finance Future Focus, Geoff Kendrick, Head of Crypto Research at Standard Chartered, delves into his insights regarding the current economic landscape of the United States.

Kendrick highlights that the US Federal Reserve is hinting at potential interest rate cuts later in 2024. He suggests that such decisions could lead to decreased volatility, benefiting assets with longer durations, such as Bitcoin and Ethereum.

The analyst emphasizes the resilience of the two largest cryptocurrencies, Bitcoin and Ethereum, amidst inflation concerns. He attributes their strong performance to investors’ confidence and the influx of cash into new ETFs.

Regarding concerns about large outflows observed after the launch of Bitcoin ETFs, Kendrick sees this as a transient issue, primarily driven by FTX-related outflows. He anticipates a positive shift as these concerns dissipate, leading to increased attractiveness of crypto-based investment products, particularly among traditional investors like the 401k market.

Kendrick predicts a shift from traditional to crypto-based funds in the coming months, with retirement fund managers likely to allocate funds to the recently launched ETFs. He foresees significant net inflows into ETFs, estimating between $50 billion to $100 billion by the end of the year, signaling a promising trajectory for these products.

Positive Sentiment Towards Spot ETH ETFs Approval

During the interview, Kendrick observed an unexpected trend in Ethereum’s performance, noting its resilience despite last week’s underwhelming Treasury yields performance.

Contrary to expectations, “risk assets haven’t sold off,” and instead, “fresh all-time highs in the likes of NASDAQ, NVIDIA particularly,” were observed. Kendrick highlighted Ethereum’s significant role in the tech industry, particularly in decentralized finance (DeFi) and other areas, which has contributed to its robust performance alongside other risk assets.

With the impending launch of an Ethereum ETF, Kendrick anticipates further positive momentum in Ethereum’s market. He predicts that the interest from the 401k market in crypto-related investment products will extend to spot Ether ETFs, especially after potential approval by the US Securities and Exchange Commission (SEC) in May.

Kendrick forecasts a substantial net inflow into spot Ether ETFs, estimating between $20 billion and $35 billion throughout 2024 if they receive regulatory approval.

Expressing his sentiments on the involvement of big institutions in the crypto space, Kendrick emphasized the importance of traditional finance’s presence and its role in normalizing the crypto market. He views the introduction of crypto-based ETFs as a significant step towards bridging the gap between traditional and crypto sectors, fostering the evolution of both.

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