Exposure to Bitcoin and Ether, the two largest cryptocurrencies, will significantly boost the returns of traditional investment portfolios.
Adding Bitcoin (BTC) and Ether (ETH) to investor portfolios will “greatly improve” the return on investment (ROI), according to Philippe Meyer, head of digital and blockchain solutions at BBVA.
During a panel at the Web3 Corporate Innovation Day, Meyer said that the firm had observed that introducing a small portion of digital assets like Bitcoin or Ether is “greatly improving the performance” of investment portfolios:
“So if you add something like 3% to 5% of your assets under management in crypto it’s really making all the difference.”
Meyer said that a portfolio allocation of 3%–5% in cryptocurrency can significantly boost investor returns:
“So anyone interested in having a better return on his assets should consider this type of asset class.”
Meyer’s comments come amid a crypto bull cycle, with Bitcoin’s price up over 146% over the past year, trading above the $65,383 mark, according to CoinMarketCap data.
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Bitcoin triples the return of the S&P 500 in 2024
During 2024, Bitcoin’s price has significantly outperformed the return of the S&P 500, the stock market index tracking the performance of the 500 largest publicly listed firms.
Since the start of the year, Bitcoin’s price is up over 47% year-to-date (YTD), while the S&P 500 only rose 15% — meaning that BTC has outperformed the index by over threefold, TradingView data shows.
Zooming out, the discrepancy in returns is even larger. On the yearly timeframe, BTC is up 147%, while the S&P 500 is only up 24%, meaning that BTC has outperformed the index by over sixfold.
However, Bitcoin has lost some steam in the short term, falling 2.3% on the monthly chart, while the S&P 500 rose 2.8% during the same timeframe.
Related: Bitcoin price ‘clusters’ hint at more downside: Is BTC about to lose $64K support?
Bitcoin’s price remains dragged down by ETF outflows
Bitcoin’s price is currently in a correction, following slowing inflows from the United States spot Bitcoin exchange-traded funds (ETFs).
Last week, the U.S. Bitcoin ETFs broke a streak of 20 consecutive days of net positive inflows and registered three days of negative outflows. The ETFs saw over $145 million worth of outflows on June 17, according to Farside Investors data.
The primary reason behind the outflows is ETF investors lacking conviction and selling below their initial cost basis, according to Jag Kooner, head of derivatives at Bitfinex.
Kooner told Cointelegraph:
“This is a pattern among ETF investors, where they seem to magnify market moves, as we saw a similar dynamic when there were net inflows in late April of over $1 billion when BTC range highs were above $70,000, followed by significant outflows when range lows approached $60,000.”