Source: Zhitong Finance "Since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%)." With the rebound of the stock market, the old adage "Sell in May and Go Away" seems to have been a bad advice once again. Last month, the S&P 500 index rose 4.8%, the best May performance since 2009. The NASDAQ 100 index rose nearly 6.2%, and the NASDAQ Composite Index rose 6.9%. Goldman Sachs FICC & Equities Trading Division said: "History doesn't really support this saying. Don't sell, leave the market (go on vacation), and enjoy the good times." The rising trend is still to be continued? If history is any guide, it may indicate that the rise of the stock market is not over yet. Looking ahead to the rest of 2024, Scott Rubner, Managing Director of the Goldman Sachs Global Markets Division and tactical expert, pointed out the following historical background for investors. Rubner stated that the S&P 500 index has risen 10.7% year-to-date, and since 1950, the S&P 500 index has risen more than 10% 21 times as of the end of May. In about 90% of these cases, the S&P 500 index rose for the rest of the year. There were only two instances of declines for the rest of the year, in 1987 (-13%) and 1986 (-0.1%). "Since 1950, the median return of the last 7 months of each year (June 1 to December 31) is 5.4%. In the aforementioned 21 cases, the average performance of the last 7 months increased to 8.1%." Rubner added. Rubner also pointed out that the NASDAQ index has risen for 16 consecutive Julys, with an average return of about 4.64%.
More importantly, the approval of the spot Bitcoin etf may have a greater impact in the future.
Bitcoin has risen 154% in the past year. Several factors have made this recovery possible, including the weakening concern of an economic recession leading investors to turn to risk assets. And more importantly, the approval of the spot Bitcoin etf may have a greater impact in the future.
Specifically, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs in January. Some analysts say the decision is a watershed moment for cryptocurrencies as these ETFs may release the demand of institutional investors. Institutional investors manage about $100 trillion in assets.
Several hedge fund managers bought iShares Bitcoin Trust (IBIT.US) in the first quarter. Israel England from Millennium Management bought 20.9 million shares of iShares Bitcoin Trust worth $844 million on March 31; apart from options contracts, the ETF was his 12th largest position. Steven Schonfeld from Schonfeld Strategic Advisors bought 6.1 million shares of iShares Bitcoin Trust worth $752 million; apart from options contracts, the ETF was his 2nd largest position. Ken Griffi from Citadel Advisors bought 440,709 shares of iShares Bitcoin Trust worth $17.8 million. Paul Singer from Elliot Investment Management bought 296,010 shares of iShares Bitcoin Trust worth $12 million.
After the SEC approved spot Bitcoin ETFs, some analysts made bold predictions. For example, Anthony Scaramucci from SkyBridge Capital believes that the market cap of Bitcoin may surpass that of gold, which means that the price of Bitcoin will rise to $800,000, an increase of about 1050% from the current level of $69,000. Cathie Wood also believes that spot Bitcoin ETFs will eventually account for about 5% of assets managed by institutions, and predicts that Bitcoin will rise to about $3.8 million, an increase of about 5400% from the current level.
Spot Bitcoin ETFs boost demand.
Since the supply of Bitcoin is limited to 21 million coins, demand is the most important variable for the price of this cryptocurrency. In other words, the price of Bitcoin ultimately depends on supply and demand, and an increase in demand will push up its price.
Spot Bitcoin ETFs provide investors with direct exposure to Bitcoin without the friction associated with cryptocurrency exchanges. This advantage helps attract more retail and institutional investors to the market, which in turn pushes up Bitcoin prices.
Meanwhile, spot Bitcoin ETFs are often more affordable than cryptocurrency exchanges. For example, the fee for iShares Bitcoin Trust is 0.25%. By comparison, Coinbase (COIN.US) charges 0.4%-0.6% for each transaction of less than $10,000.
In addition, spot Bitcoin ETFs allow investors to add Bitcoin exposure to their existing brokerage accounts, while direct purchase of Bitcoin requires creating, financing, and maintaining a separate account with a cryptocurrency exchange.
In fact, some spot Bitcoin ETFs have achieved extraordinary success since their launch. Analyst Eric Balchunas said that iShares Bitcoin Trust and Wise Origin Bitcoin Fund accumulated more assets in the first 50 trading days than any other ETF in history.
It is worth noting that no one can guarantee that Bitcoin will reach Anthony Scaramucci's expected price of $800,000 or Cathie Wood's expected price of $3.8 million. However, anything is possible in the field of cryptocurrencies, which means that the price of Bitcoin could also fall to zero.
Ark Invest's data shows that Bitcoin's performance over the past five years has almost surpassed all other asset classes, including stocks, bonds, commodities, gold, and real estate. This information provides a convincing reason to hold Bitcoin (or spot Bitcoin ETFs), but only for investors willing to take on high risks and extreme volatility.
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