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Goldman Sachs predicts that pension funds could sell an estimated $32 billion in stocks by the end of the quarter to rebalance their portfolios.
This comes as stocks are poised to complete another strong quarter.
Jinze, a former analyst at Binance Research, weighed in on the situation, highlighting its potential impact on the Bitcoin Spot ETF market. “The impact of quarter-end rebalancing by large funds became evident as stocks that had previously made big gains faced selling pressure,” Jinze said.
According to Jinze, the quarter-end rebalancing could create significant demand for the Bitcoin ETF, which only launched in January. Jinze added, “Funds that want to invest have not yet had time to add to their portfolios, and next week may be a week of strong inflows.”
Rebalancing typically involves selling assets that appreciate and buying assets that lose value. Actual rebalancing transactions are typically scheduled for early April, so the Bitcoin ETF has not seen inflows from rebalancing in the past two weeks.
The number of Bitcoins held on exchanges has fallen by a significant 8% since May 2023 to 2.32 million, indicating a supply squeeze. According to data from Glassnode, the total share of BTC held on exchanges dropped to approximately 12% of the total BTC in circulation, the lowest level in the last five years. A move away from exchanges has traditionally been viewed as a bullish indicator and indicates a preference for holding rather than selling.
*This is not investment advice.