• The article discusses the mutual fund industry and how it handles over $54 trillion in assets.
• It examines why passive investment strategies could propel Bitcoin into a new sphere of adoption among institutional investors.
• Finally, it looks at the U.S. credit default swap (CDS) rates and why they are not currently worrisome.
Mutual Fund Industry Overview
The Mutual Fund Industry is comprised of some of the world’s largest asset managers, including BlackRock, Fidelity and Vanguard, who manage a combined total of around $120 trillion in assets. This money would be enough to buy all companies listed on the S&P 500 Index, as well as all gold, fiat bills and coins in circulation globally. Despite poor returns for fixed income investments over the past three years, these asset managers still largely prefer this type of investment due to its relative safety.
Bitcoin Adoption Among Institutional Investors
Passive investment strategies have opened up possibilities for Bitcoin (BTC) to become a part of the mutual fund industry and gain adoption among institutional investors. Analyzing cause-and-effect relationships between traditional financial events and day-to-day cryptocurrency activity can give an indication of what might happen when Bitcoin enters this realm of investing.
Unemployment Rate Analysis
A question from “Film City” was posed about whether or not low unemployment rate figures were good news for risky investments like cryptocurrencies – Marcel Pechman explains that while a low unemployment rate isn’t necessarily bullish for risky investments, an increase beyond 10% would be certainly detrimental to digital assets such as Bitcoin.
U.S Credit Default Swap Rates
The analyst then examines U.S credit default swap rates which recently reached an 11 year high – CDS activate if debt issuers fail to honor payments on their debt – Pechman explains that current CDS levels are not yet worrisome but advises caution when analyzing specific risks related to US dollar currency stability which could affect cryptocurrency prices negatively in future markets cycles..
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