Does cryptocurrency theft trigger flows to QQQ?
A Bitcoin correction could be the cause of a theft of cryptocurrencies to ETFs like the Invesco Trust QQQ (QQQ).
The price of Bitcoin was up almost 120% before coming back to earth recently. However, the main cryptocurrency is still up almost 30% this year.
“In what is becoming the modern equivalent of storing cash when you don’t know where to invest – at least for the growing ranks of newbies who embrace a win-big-or-lose-big mentality – the demand for exchange-traded funds which follow major indices like the S&P 500 and the Nasdaq 100, very technological, is in full swing, explains an article of Bloomberg.
“In the last week alone, top retail investor bets pushed $ 434 million in State Street’s SPDR S&P 500 ETF Trust (SPY) and $ 235 million in Invesco’s QQQ Trust Series 1 (QQQ), according to Vanda Research, ”the article adds.
QQQ seeks investment results that generally match the price and return performance of the NASDAQ-100® Index. To maintain the correspondence between the composition and the weightings of the securities of the trust and the stocks of the NASDAQ-100® Index, the advisor adjusts the securities from time to time to conform to periodic changes in identity and / or relative weightings of the index. securities.
The composition and weighting of the securities portion of a portfolio deposit is also adjusted to conform to changes in the index. QQQ is praised for its liquidity, as well as for its global exposure to big names in big tech.
A game of refuge?
It stands to reason that a fund like QQQ is a relatively conservative game for overnight cryptocurrency traders.
“Large entries in ETFs typically indicate that retail investors have little conviction in specific themes or niches,” said Eric Liu, co-founder of Vanda Research. “And so, they just stack in big index trackers, for lack of a better alternative.”
Still, over the past few weeks, markets have been less stable, flipping between green and red amid rising inflation fears.
“The US stock market was recently hit by mounting inflation concerns that sparked massive sell-offs of riskier stocks as cryptocurrencies like Bitcoin were whipped, with a basket of 37 so-called meme stocks followed by Bloomberg struggling to pick up speed, ”the article adds. .
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