Latest news with #EricBalchunas
Yahoo
a day ago
- Business
- Yahoo
BlackRock's Bitcoin ETF Reaches Record Low Volatility, Draws Billions in Flows
BlackRock's iShares Bitcoin Trust exchange-traded fund (IBIT) is experiencing record-low volatility, according to Senior Bloomberg ETF analyst Eric Balchunas, which is attracting more interest from larger investors looking for a "digital gold" rather than speculative tech-like behavior. The 90-day rolling volatility of 47.64 is the lowest since the ETF was introduced in January 2024, Balchunas posted on X, a degree of stability that can be self-reinforcing. As volatility drops, larger and more risk-averse investors tend to enter, which in turn further suppresses volatility. "The thing with volatility is it can become self-fulfilling," Balchunas said in his post. "The lower the volatility gets, the more bigger investors will bite who will help lower volatility even more. The same 'should' happen with correlation too. This is a direct result of the 'suitcoiners.'' The trend is already underway, Balchunas said, citing IBIT's outsized inflows in recent weeks. Since its debut, IBIT has pulled in $49 billion in net inflows, more than four times the amount invested into the second-ranked Fidelity Wise Origin Bitcoin Fund (FBTC), which has attracted less than $12 billion, data from Farside Investors show. In contrast, Strategy (MSTR), the software company that has made buying bitcoin BTC a strategic priority, operates on a different appeal. MSTR attracts speculators and options traders who thrive on higher implied volatility (IV). However, even MSTR's IV has dipped recently to 60%, with historical volatility at 49%, contributing to its muted price action. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Wall Street's Rush to Launch Vanguard-Style Funds Draws Warnings
(Bloomberg) — Exchange-traded funds have amassed trillions of dollars by offering investors greater tax efficiency, liquidity and lower costs than mutual funds. Now, a looming regulatory shift is poised to bring the two vehicles closer together — and threatens to complicate the very features that fueled the ETF boom. NY Wins Order Against US Funding Freeze in Congestion Fight The US Securities and Exchange Commission is expected to approve applications for dual-share-class structures, perhaps as soon as this summer, allowing managers to add an ETF sleeve to an existing mutual fund. More than 50 firms, including BlackRock Inc. and State Street Corp., are waiting for the regulator's greenlight to deploy the hybrid structure — made possible after Vanguard Group Inc.'s exclusive patent expired two years ago. The two-in-one blueprint is a tantalizing prospect for asset managers looking to break into the ETF market at scale, without having to launch a new strategy from scratch. It also offers a lifeline to firms battered by years of mutual-fund outflows, as investors fled for more tax-efficient alternatives. The hybrid structure famously helped Vanguard save its clients billions in taxes over two decades. Yet replicating that playbook may prove harder than it looks. Some Wall Street experts caution the shake-up could erode key benefits of the wrapper, especially if hybrid funds face significant withdrawals during market stress. 'I've been in the ETF business for 20 years — we have spent it talking about how great they are at managing capital gains, and I don't think folks have an appreciation for how more ETFs could potentially end up paying capital gains distributions,' said Brandon Clark, director of ETF business at Federated Hermes, who previously led the ETF capital markets team at Vanguard. At the heart of the concern is a tax dynamic that ETFs were built to avoid. These funds rarely pay capital-gains tax distributions, thanks to their in-kind redemption process, which allows the issuer to swap securities with authorized participants rather than sell them outright. By contrast, mutual funds redeem in cash, meaning managers may need to sell securities to meet outflows. If those sales generate capital gains, they may distribute them to investors. In a hybrid vehicle, those taxable gains risk getting passed onto ETF shareholders, too. 'For mutual funds drawing inflows or net zero flows, there should be no issues, but for ones with outflows, there's a potential risk for the ETF holders,' said Bloomberg Intelligence senior ETF analyst Eric Balchunas, in a note. About two-thirds of ETF issuers surveyed by consulting firm Cerulli Associates flagged this spillover issue. There's precedent. In 2009, a Vanguard fund distributed a 14% capital gain across both share classes, after a large mutual-fund withdrawal, Bloomberg data show. Though rare, the episode underscores the fiscal complications in the event a fund experiences outsized outflows within a shared portfolio. 'The investors that stand to benefit most immediately are the ones that already own the fund, as it can only improve the fund's tax efficiency,' said Ben Johnson, head of client solutions at Morningstar Inc. Wirehouses like UBS Group Inc., which list funds for financial advisers, are studying how this would impact which funds they will offer on their platforms. An ETF share class could 'run the risk of receiving tax distributions they otherwise wouldn't have,' said Mustafa Osman, who runs due diligence on funds before they are added to the platform as head of ETF and mutual fund strategy and analytics at UBS. The SEC refers to this issue as 'cross-subsidization' and has directed applicants to detail how they'll mitigate it. In response, firms like Dimensional Fund Advisors have amended their applications to detail a governance structure where the fund works with its independent board to determine if the dual structure is beneficial to both shareholders, while monitoring risks like cross-subsidization before and after launch. Among issues that would be considered: cash levels, unrealized gains and losses, and turnover. Even standalone ETFs are paying out more capital gains more frequently these days, as more products track derivatives or assets that have risen markedly in value. In 2024, roughly 5% of passive ETFs paid out capital gains, the most since 2021, and 12% of active ones did, the highest since 2022, data compiled by Bloomberg show. Those figures are much larger for mutual funds, of course, with more than 50% paying them out last year. Another complication lies in how the structure would impact the economics of ETF listings on big-name platforms. Cerulli estimates wirehouses and broker-dealer platforms could lose as much as $30 billion in revenue if mutual fund assets shift to ETF share classes in droves. To stem the loss of revenue, intermediaries could begin to introduce revenue-sharing agreements with ETF issuers, which may ultimately raise costs for investors. 'This trend of trying to recapture some of that revenue that's been slowly melting from the mutual funds has been in place for ETFs for the last few years,' said Ben Slavin, global head of ETFs at BNY. Beyond fees and tax advantages, ETFs famously offer more liquidity than mutual funds — a selling point that may be undermined in some instances, if the two models are combined. According to Cerulli, ETFs that struggle to scale could see wider bid-ask spreads, with costs ultimately passed onto investors. All told, this is uncharted territory. Vanguard's success relied on stable flows, deep relationships with market makers and highly liquid portfolios. Large firms may be able to follow suit smoothly, but smaller managers holding less liquid assets could find the road ahead trickier. 'It's not evident that authorized participants are ready for a plethora of smaller ETFs as a share class exposures, especially outside the most liquid underlying markets,' Cerulli researchers wrote in a report. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Why Apple Still Hasn't Cracked AI Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
Business Mayor
7 days ago
- Business
- Business Mayor
Altcoins Lag As Bitcoin Price Breaks $111,000: Why This Bull Market Is Different From 2021
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure Crypto firm Matrixport has delivered insights into why this bull market is different from the 2021 bull run. Their analysis sheds more light on why altcoins are lagging despite the Bitcoin price rally to a new all-time high (ATH) at $111,900. Why This Bull Market Is Different As Altcoins Lag Behind Bitcoin Price In an X post , Matrixport stated that many traders are missing out on the current Bitcoin price rally as traditional retail engagement indicators remain low despite the rally to a new ATH. The firm explained that this rally is happening thanks to institutional investors, with retail investors on the sidelines in this bull market . Matrixport noted that this explains why funding rates remain subdued, retail activity is low, and many altcoins continue to lag as the Bitcoin price rallies in this bull market. The firm also revealed that retail traders make the fundamental mistake of not anticipating market corrections, leading to them occasionally closing their positions during sharp drawdowns. This bull market also differs from 2021 in that retail's share of Bitcoin ownership is no longer expanding. Crypto whales have stepped in and are absorbing most of the flagship crypto's supply, kicking retail investors to the curb. Bloomberg analyst Eric Balchunas once noted that this could explain why the Bitcoin price has held up well during major corrections. According to Matrixport, understanding how corporate demand influences the Bitcoin price behavior and how long this trend is likely to last is critical as the shift in this bull market progresses. Meanwhile, the absence of retail traders in this cycle explains why funding rates and trading volumes are relatively low, with altcoins lagging. Read More FTT crashes 37% in 7 days: Is it finally curtains for FTX? The firm noted that market participants are witnessing a quiet transfer of Bitcoin from early adopters and investors, miners, and exchanges to corporations like Strategy and institutional investors like BlackRock. Matrixport again asserted that the current Bitcoin price rally is driven by spot market accumulation and not derivatives activity, which could explain why altcoins are lagging behind BTC. What Next For BTC And Altcoins In an X post, crypto analyst Kevin Capital stated that the next important step is for the Bitcoin price to record a weekly close above $106,800 and then follow through or consolidate next week. He remarked that BTC is really the only thing that matters and urged market participants to take their eyes off altcoins. If the Bitcoin price fails to accomplish that goal, the analyst stated that market participants can then turn their attention to the reverse psychology 2021 fractals. It is worth mentioning that the analyst once predicted that altcoins led by Dogecoin will still have their run once BTC's dominance cools off in the summer. At the time of writing, the Bitcoin price is trading at around $108,258, down almost 2% in the last 24 hours, according to data from CoinMarketCap. Total market cap excluding BTC at $1.2 trillion | Source: TOTAL2 on Featured image from Pixabay, chart from
Yahoo
23-05-2025
- Business
- Yahoo
Investors pile into Bitcoin ETFs as Bitcoin's price hovers near all-time high
Bitcoin exchange-traded funds (ETFs), a stock market investment that tracks the price of Bitcoin, attracted over $2.5 billion in investments this week as the original cryptocurrency rebounded to new highs. Bitcoin ETFs saw their largest inflows in weeks as the underlying currency reclaimed its recent losses and achieved a new all-time high of $111,000 on Thursday. IBIT, the Bitcoin ETF issued by asset management giant BlackRock, raked in $877 million on Thursday, the largest single day inflow of any ETF in history, according to Eric Balchunas, an ETF analyst at Bloomberg. '$IBIT was #1 among ALL ETFs in flows yesterday,' Balchunas wrote on X on Friday. He attributed the buying action to excitement around Bitcoin's new all-time high, saying the achievement is 'a byproduct of the ATH-induced feeding frenzy volume.' Bitcoin climbed to new highs after President Trump rolled back tariffs on Chinese imports from 145% to 30% last week, a significant de-escalation of the looming trade war between the two nations. However, the currency has tumbled to $108,000 on Friday as Trump threatened to impose additional tariffs on the European Union. Financial markets were hit hard in early April when Trump announced a slew of markups on nearly all foreign imports in addition to a 10% baseline tariff. Following the announcement, investors fled risky assets like Bitcoin and equities amid fears that the tariffs would increase inflation and disrupt global supply chains. However, as Bitcoin fell alongside a historic stock market meltdown, Trump authorized a 90-day pause on most tariffs—keeping in place ones on Chinese imports and the 10% baseline levy—as he negotiates with foreign nations. Since then, the stock market has remained volatile as Trump engages in trade talks with China, the United Kingdom, the European Union, and others, but Bitcoin has continued to steadily rise. Some crypto industry leaders argue that Bitcoin's divergence from the stock market proves its value as a currency detached from inflation because it is not governed by a centralized entity. Matt Hougan, chief investment officer at ETF issuer Bitwise, told Fortune that Bitcoin is an efficient inflation hedge, much like gold. Investors are rushing to Bitcoin ETFs to protect their portfolios against inflation and other macroeconomic factors that plague traditional fiat-currencies, he said. 'Bitcoin is proving its mettle as a macro hedge against fiat debasement at the exact moment the world is waking up to the need for that hedge,' Hougan said. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
First U.S. XRP Futures ETF Begins Trading on Nasdaq
The first-ever U.S.-based exchange-traded fund (ETF) tracking XRP futures on a one-to-one basis started trading on the Nasdaq exchange on Thursday. The Volatility Shares XRP ETF (XRPI) has a gross expense ratio of 1.15% and a net expense ratio after fee waivers of 0.94%. The fund will invest at least 80% of its assets in XRP futures contracts and shares of other XRP-linked ETPs, according to a prospectus. Volatility Shares also plans to also launch a leveraged 2x XRP futures ETF where it would join the Teucrium (XXRP), which opened for business in April.. XXRP has so far pulled in $121 million in assets-under-management, which Bloomberg senior ETF analyst Eric Balchunased characterized as a 'good signal that there will be demand' for XRPI.
