Bitcoin performance:

  • Bitcoin has seen a 100% increase in value year-to-date, with a surge in the first quarter and continued momentum.
  • Despite market speculation and ETF news driving this surge, it's surprising given that Bitcoin is typically most correlated to money supply changes.

Bitcoin volatility:

  • Bitcoin's volatility has decreased from an 80 vol asset down to around 50, but there's been very little decrease in volatility even as prices have risen significantly.
  • The majority of Bitcoin remains illiquid, with only a few million on exchanges, making it susceptible to price movements based on marginal trades.

Bitcoin adoption cycle:

  • There is a belief in the virtuous cycle where increased demand leads to higher prices, making mining more profitable, increasing network security, and ultimately leading to further demand.
  • This cycle demonstrates how heightened interest in Bitcoin can lead to tangible improvements in its network robustness.

Ethereum fundamentals:

  • Ethereum's long-term fundamentals are under scrutiny as addresses and activity are down while fees are decreasing.
  • The introduction of Layer 2 solutions may impact Ethereum's base layer activity, potentially cannibalizing or complementing its overall usage.

Portfolio construction for crypto:

  • Some advisors are considering allocating up to 5% of portfolios to cryptocurrencies due to growing interest and potential returns exceeding those offered by traditional assets.
  • However, the challenge lies in getting investors off zero exposure and educating them about the unique characteristics of cryptocurrencies within portfolio construction strategies.

Impact of bitcoin ETF:

  • The launch of a successful Bitcoin ETF could create a positive feedback loop where increased demand drives up prices, subsequently benefiting miners through improved profitability and enhancing network security.
  • While an ETF may not directly impact Bitcoin itself beyond serving as a secondary holder of the asset, its success could signal broader acceptance and understanding of cryptocurrency investments.

Fidelity digital assets services:

  • Fidelity Digital Assets offers custody services for both Bitcoin and Ether alongside an execution platform providing liquidity options for trading these assets.
  • Advisors working with fidelity can utilize their products like Wealthscape platform for streamlined access to cryptocurrency investment opportunities.