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QCP Capital: Bitcoin's risk premium relative to stocks is expected to decrease

QCP Capital: Bitcoin's risk premium relative to stocks is expected to decrease

CointimeCointime2024/11/08 11:11
By:Cointime

On November 8th, QCP Capital, a Singapore-based crypto investment firm, stated that yesterday the net inflow of Bitcoin spot ETF reached a record high of $1.38 billion. This, combined with the optimistic sentiment brought about by Trump's victory and the widespread expectation of a 25 basis point rate cut by the Federal Reserve, pushed the price of Bitcoin up to $77,000 earlier this morning.

However, investors have begun to withdraw from some of the "Trump trades": the US dollar has given back most of its gains since the election, and bond yields have fallen back into their recent range after a brief period of significant volatility. As the market considers Trump's plan to impose a 60% tariff on China and other fiscal issues such as rising bond yields, it is expected that the risk premium of Bitcoin relative to stocks will decrease, which may make it poised to outperform other risk assets.

The continuing bullish sentiment towards Bitcoin may also create a feedback loop, where an increase in ETF inflows pushes up the price of Bitcoin, and the rise in the price of Bitcoin attracts more retail capital and systematic funds to buy in as volatility decreases.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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