Bitcoin’s performance has overshadowed crypto liquid funds in 2025 due to strong institutional interest and ETF launches in the United States.
This event underscores the shifting landscape as institutional investors prioritize Bitcoin over other cryptocurrencies, influencing market strategies and asset allocations.
Bitcoin Outperforms Crypto Funds Amid Institutional Surge
Bitcoin has drawn substantial attention and investment, outperforming most crypto funds this cycle. Despite deep liquidity, key players note a lack of comprehensive understanding among market participants. John Glover, CIO, Ledn, noted,
“Even though we have deep liquidity, there’re not enough participants in [bitcoin] that have a complete understanding of what it is yet and have formed that view.”
Institutional involvement increased significantly, with Bitcoin being linked to traditional finance interests similar to gold. ETFs have been pivotal, facilitating increased allocations to Bitcoin at higher levels.
Bitcoin’s Safe-Haven Status Reinforced in Latest Cycle
The current cycle has reinforced Bitcoin’s role as a safe-haven asset. Crypto funds face challenges due to mandates requiring broader allocations, which have not yielded comparable returns to Bitcoin.
Market surveys indicate nearly 20% of advisers plan Bitcoin allocations, marking a shift. The spot Bitcoin ETFs’ introduction was key, funneling new liquidity primarily into Bitcoin rather than altcoins.
Institutional Flows Favor Bitcoin Over Broader Funds
Bitcoin’s performance aligns with its past four-year cycles but lags behind some prior runs. Historically, capital flows into Bitcoin peak post-halving before rotating into altcoins.
Expert opinions suggest continued dominance of Bitcoin, with expectations for its price to track closely with historical patterns.
“Our message to investors is that bitcoin’s performance is roughly in sync with the historical four-year cycles. As a result, we are optimistic about its prospects for the next six to twelve months,” remarks Ark Invest.
Institutional flows heavily favor BTC, hindering broader fund performance.
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