Is Crypto Sparking Inflows Theft in QQQ?
Bitcoin correction could be the impetus behind cryptocurrency theft to ETFs like Invesco QQQ Trust (QQQ ).
The price of Bitcoin rose almost 120% before recently falling back to earth. However, the main cryptocurrency is still up almost 30% this year.
“In what is emerging as the modern day equivalent of storing money when you don’t know where to invest – at least for the growing ranks of newbies who are adopting a win-big-or-lose-big-time mindset – the Demand for exchange-traded funds that track big indexes like the high-tech S&P 500 and Nasdaq 100 is skyrocketing, ”a Bloomberg article explained.
“In the past week alone, top retail investors have pushed $ 434 million down State Street SPDR S&P 500 AND F Trust (TO SPY) and $ 235 million in QQQ Trust Series 1 (QQQ), according to Vanda Research, ”adds the article.
QQQ seeks investment results that generally match the price and yield of the NASDAQ-100 Index®. Maintain the correspondence between the composition and the weight of the securities of the trust and the shares of the NASDAQ-100 Index®, the advisor adjusts the securities from time to time to conform to periodic changes in the identity and / or relative weightings of the securities in the index.
The composition and weighting of the securities portion of a portfolio deposit are also adjusted to conform to changes in the index. QQQ is praised for its liquidity, as well as its global exposure to big names in big tech.
It goes without saying that a fund like QQQ is a relatively conservative game for on-the-fly crypto traders.
“Large inflows into ETFs usually indicate that retail investors have little conviction in specific themes or niches,” said Eric Liu, co-founder of Vanda Research. “And so they pile up in big index trackers for lack of a better alternative.”
Yet over the past few weeks, markets have been less stable, hovering between green and red amid growing concerns about inflation.
“The US stock market has recently been hit by growing inflation concerns that have triggered the sell-off of riskier stocks as cryptocurrencies like Bitcoin have been whipped, with a basket of 37 so-called memes stocks being tracked. by Bloomberg struggling to pick up speed, ”the article adds. .