Bitcoin ETFs could open floodgates to $30 trillion wealth management market
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Now that bitcoin ETFs are trading across U.S. public markets, many large money managers that have been effectively locked out of crypto finally have a way to access the primary digital currency.
For the $30 trillion advised wealth management industry, the floodgates could be about to open. Analysts at Standard Chartered anticipate fund inflows in the range of $50 billion to $100 billion in 2024.
“Bitcoin is beginning to become a benchmark asset for the younger generation,” said Anthony Pompliano, founder of Pomp Investments. “We know most investors can’t beat benchmarks, so adding the new benchmark to your asset allocation is the only way to try to keep up.”
Bitcoin rose as high as $49,000 on Thursday, reaching levels not seen since December 2021, before dropping Friday to around $43,000. It soared 150% last year following a brutal selloff in 2022.
Wide swaths of the investment world missed out on the 2023 rally. According to VanEck CEO Jan van Eck, many fiduciaries, financial advisors and banks had been explicitly told in the past “not to touch crypto,” due largely to its unregulated nature.
That changed on Wednesday after the Securities and Exchange Commission cleared the sales of spot bitcoin ETFs, allowing investors to access bitcoin the same way they purchase stock and bond index funds. SEC Chair Gary Gensler continues to issue stern warnings when it comes to crypto investments, but that’s not holding back activity.
For its Hundredfold Select Alternatives Fund, mutual fund manager Advisors Preferred Trust is investing up to 15% of total assets for indirect bitcoin exposure through funds and futures contracts, according to a recent prospectus.
Pompliano says “most passive funds are looking for ways to increase performance.”
Bitwise Asset Management is one of the 11 issuers that were granted initial approval for a bitcoin product. Chief Investment Officer Matt Hougan said the Bitwise Bitcoin ETF, which is offering the lowest fee at 0.2% of holdings, is primarily targeting financial advisors and family offices.
“That includes RIAs [registered investment advisors] and includes, eventually, wirehouses — that is a many trillion dollar market,” said Hougan, adding that advisors are “increasingly carving out” an allocation of 1% to 5%. “We know that they’re interested in crypto, and we know that they’ve been waiting for an ETF.”
In a survey of financial advisors recently conducted in conjunction with VettaFi, a data-driven ETF platform, Bitwise found that 88% of advisors interested in purchasing bitcoin were waiting until after a spot bitcoin ETF was approved. Among advisors who already invest in crypto, large allocations (more than 3% of a portfolio) more than doubled to 47% in 2023 from the prior year.
“For the vast majority of people, a low-cost bitcoin ETF is going to be the easiest way to do that,” Hougan said.
According to data from Robinhood, 81% of bitcoin ETF trading volume in the first week was in individual accounts, with the rest in retirement accounts.
Even before the SEC’s announcement Wednesday, the 2022 CFA Institute Investor Trust Study found that 94% of state and local pension plans had some crypto exposure. The new products potentially offer more legitimacy and lower costs for retirement plans that want to increase allocation.
Financial firms are offering differing advice on how best to enter the space.
In a report on its website in October, Galaxy Digital said the “strongest marginal improvement” occurred when portfolios moved from a 0% to 1% bitcoin allocation. As far back as 2019, WisdomTree said that adding bitcoin to a portfolio that’s traditionally 60% equities and 40% bonds “can improve the risk-return profile” and that from 2014 to 2019 “even a one percent allocation led to an 8.3% outperformance versus the base portfolio.”
Fidelity analyzed performance through mid-2022 and noted that “bitcoin boosted a portfolio’s returns during specific periods in the past, though it also came with substantial volatility.” To date, the firm said, bitcoin has not held up well as a hedge against inflation, but it acknowledged that “assessing this was challenging, given that inflation has been low throughout most of bitcoin’s history.”
Castle Island Ventures founder Matt Walsh, who previously led a number of Fidelity Investments’ blockchain and cryptoasset initiatives, said the types of funds quickest to jump into the market are likely to be those with a focus on high-growth tech stocks. But he also sees broader appeal.
“I think you could also see it in commodity-based portfolios, like gold-based funds that see this as a sort of digital gold,” said Walsh.
WATCH: SEC approves bitcoin ETFs
National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.
The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.
Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.
“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”
Electrek reported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.
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Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.
The rollout of Supercharger V4 has been a strange one, to say the least.
Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.
Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.
For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although
Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”
Here are the main features of the V4 Cabinet as per Tesla:
- Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
- Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
- Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.
Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.
We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.
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Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.
With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.
A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”
In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.
With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.
Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.
The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.
Hyundai hopes new AI-powered EV boosts sales in China
Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.
Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.
BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.
Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).
Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.
Last month, Hyundai opened its first overseas digital R&D center in China to help kick off its return to the region.
According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs
With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.
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