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Bitcoin: From a Fad to Emerging as a Store of Value

The Institutionalization of Bitcoin and the Reasons Why This Cryptocurrency May Have Evolved from a Speculative Asset to a Next-Generation Store of Value, Worthy of a Permanent Allocation in Client Portfolios, is the Central Topic of One of the Recent Analyses by BigSur Partners. Before delving into the subject in the study The Thinking Man, the firm’s experts Rene Negron, Analyst, and Leandro Perez, Summer Intern, review the main options investors have to gain exposure to Bitcoin:

Direct Ownership: Owning Bitcoin directly through a wallet, on a cryptocurrency exchange/brokerage, which can be custodied by an exchange, an institution, or self-custodied via hardware wallets. Advantages include actual ownership of the asset, full control over it, and avoiding issuer risk. However, drawbacks exist, such as security concerns, wallet management, or possible tax complexity.
Spot Bitcoin ETFs: For example, the BlackRock iShares (IBIT) or a spot Bitcoin ETF with embedded overlay options, such as Amplify’s Bitcoin 2% Monthly Option Income ETF (BITY). These vehicles offer advantages like trading as a stock, while the physical Bitcoin is held in “cold storage.” Additionally, they offer simplicity, regulated product status, IRA/401(k) eligibility, potential access to liquid options markets for hedging/overwrite, and possible tax benefits. Disadvantages include tracking error risks and management fees.
Publicly Traded Bitcoin-Related Companies: MicroStrategy (MSTR), both MSTR common shares and dividend-paying convertible preferred shares like STRK/STRF/STRD, Coinbase (COIN), Marathon (MARA), Riot Platform (RIOT), and Block (SQ). Advantages include the ability for investors to arbitrage valuation differences between Bitcoin and the company’s value, and liquidity. Drawbacks include exposure to market and idiosyncratic risks linked to strategic execution, as well as potential overvaluation and “meme” investment dynamics.

From Fad to Considered Essential

Bitcoin has undergone a radical transformation to become a legitimate institutional asset class. The study’s authors recall that in 2017, JP Morgan Chase CEO Jamie Dimon criticized the cryptocurrency, stating it was “worse than tulip bulbs” and predicted it “won’t end well; it will blow up.”

At that time, Bitcoin was trading around $2,500 and was described as an unregulated bubble with no intrinsic value. By 2025, the narrative has changed, as JP Morgan now allows private banking clients to hold Bitcoins in their portfolios, although the bank itself still does not custody crypto assets, and Dimon, though more moderate, remains skeptical.

As trade wars and fiscal excesses have heightened investor concerns about the fate of the U.S. dollar, Bitcoin’s role as a hedge against inflation and devaluation, thanks to technology, “has only grown,” according to BigSur Partners experts.

Former detractors like Larry Fink, Ray Dalio, and Bill Miller have shifted from using terms like “money laundering” and “bubble” to “digital gold” and “portfolio hedge.” This shift reflects the growing institutional acceptance of Bitcoin. “In a world where global central banks are continuously willing to print more money, Bitcoin’s fixed supply — likely capped at 21 million — has only become more attractive,” they comment.

The Institutional Boom: Why Confidence in Bitcoin Has Shifted

After surpassing $70,000 in 2024 and undergoing a 20% correction in Q1 2025, Bitcoin reached new highs during the summer, nearing $121,000 by the end of July.

Bitcoin also showed surprising resilience during the stock market volatility of “Liberation Day” in April, when many overvalued tech stocks suffered severe losses. This moderated volatility, according to BigSur Partners experts, is because a larger portion of Bitcoin’s ownership base now consists of individuals and organizations with less speculative and slower investment philosophies.

The firm cites a recent survey by Coinbase-EY Parthenon showing that 59% of institutional investors plan to allocate more than 5% of their assets to cryptocurrencies, with Bitcoin being the primary exposure.

A key driver of this institutional adoption has been the rapid growth of spot Bitcoin ETFs, as well as thematic exchange-traded funds that offer exposure to companies operating in the crypto space: in 2025 alone, over $68 billion from pensions, endowments, family offices, and asset managers have flowed into U.S. spot Bitcoin ETFs.

In turn, this increase in ETF demand has fueled the development of a liquid Bitcoin options market, allowing investors to implement more sophisticated volatility strategies on their core exposure to the world’s largest cryptocurrency. This includes hedging and generating current income through covered call writing.

Global Adoption: Governments, Pension Funds, and Companies Embrace Bitcoin

Another major pillar of rising institutional interest in Bitcoin is sovereign buyers, according to BigSur Partners analysts. In March 2025, the Trump Administration established a strategic Bitcoin reserve with 200,000 units, making it the largest known state holder of the cryptocurrency.

Additionally, Texas has created a publicly funded Bitcoin reserve, allocating $10 million to Bitcoin purchases; New Hampshire and Arizona have passed laws allowing them to establish cryptocurrency reserves; and El Salvador, Bhutan, Pakistan, Switzerland, Norway, South Korea, and Abu Dhabi have integrated Bitcoin and/or Bitcoin proxies into their sovereign investment allocations.

In the pension space, the State of Wisconsin Investment Board, the State of Michigan Retirement System, the Ohio Public Employees Retirement System, and the California Public Employees’ Retirement System (CalPERS) have made multi-billion dollar investments in Bitcoin and its proxies. This trend extends internationally, with a large but undisclosed UK pension fund allocating 3% of its portfolio to Bitcoin.

On the corporate front, Tesla, Block, Coinbase, GameStop, and other companies have added Bitcoin to their balance sheets. The experts highlight that MicroStrategy has transformed into a leveraged Bitcoin investment firm, issuing securities across its capital structure (senior debt, convertible, debt, and equity) and allocating proceeds to Bitcoin purchases. CEO Michael Saylor views Bitcoin as “superior to cash, and we are expanding our digital asset strategy to maximize shareholder value”; the company holds 607,770 Bitcoins with a market value of around $72 billion.

Corporate adoption of Bitcoin offers strategic advantages but comes with significant risks, according to BigSur Partners. Companies holding Bitcoin face price volatility, regulatory uncertainty, and potential distortions in earnings as market fluctuations can impact reported results.

Nevertheless, Bitcoin offers an attractive hedge against inflation and fiat currency devaluation, prompting companies to treat it as a long-term treasury asset.

“We believe the trend of more companies diversifying their dollar reserves away from cash and into Bitcoin will likely continue,” BigSur Partners forecasts, especially at a time when monetary, interest rate, and trade regimes “are being disrupted.”

However, they point out that while corporate treasury allocations are a net positive, many of the companies that have chosen this path do so because their core businesses are failing or would have failed without Bitcoin’s appreciation. “It will be important to see how more operationally successful companies (such as more Mag7 names) invest capital into Bitcoin, something we expect to happen with greater regulatory clarity,” they conclude.

Regulation, Stablecoins, and the Erosion of Bitcoin’s Original Vision

As Bitcoin becomes increasingly integrated into the global financial system, new legislation is reshaping how it is regulated and accessed. The FIT21/CLARITY laws aim to clarify registration requirements and regulatory structures for Bitcoin market participants, including digital commodity exchanges, brokers, and dealers.

The experts stress that these also seek to end the longstanding turf war between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Additionally, the recently signed GENIUS Act establishes a federal framework for stablecoins, requiring 1:1 parity with the dollar, fast and low-cost transactions, making them particularly useful for cross-border payments, commerce, and reserves, with monthly audits and compliance with identity verification and anti-money laundering regulations.

Stablecoins like USDC and USDT are digital currencies pegged to the U.S. dollar, designed to maintain a stable value. They are primarily used in regions with unstable currencies. The evolution of regulatory frameworks marks a critical turning point in Bitcoin’s maturation. “By providing regulatory clarity for spot ETFs and stablecoins, these reforms have laid the legal foundation for large-scale institutional participation,” they clarify.

Correlations and Interconnection Between TradFi and DeFi

A common objection to strategic portfolio allocations in Bitcoin is that the world’s largest cryptocurrency is highly correlated with growth/technology stocks, thus offering minimal value as a diversifier.

Based on 90-day rolling correlation data between Bitcoin’s and Nasdaq 100’s daily returns, BigSur Partners experts observe two notable events: First, that correlations between Bitcoin and growth stocks were lower in Bitcoin’s early days and have since increased in parallel with institutional adoption.

Second, in recent episodes of market volatility — Liberation Day, unwinding of the Japanese carry trade… — Bitcoin has held up well and has been more effective as a portfolio diversifier.

Thus, BigSur Partners analysts summarize that the current 90-day correlation between Bitcoin and the Nasdaq 100 is only 0.15. What is unique about this period is that equities have rebounded alongside a weakening dollar, while Bitcoin’s correlations have decreased significantly. Therefore, they interpret this as “further evidence that Bitcoin is increasingly viewed as a store of value and not a speculative asset.”

The Democratization of Alternative Investments as a Tool to Build a New World

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The Democratization of Alternative Investments Has Become a Key Factor in Restructuring the Portfolios of Individual Asset Owners. In just under twenty years, alternative investment assets under management have quintupled, driven mainly by institutional allocations.

In this analysis, Sandy Kaul – Senior Vice President, Head of Industry Advisory Services at Franklin Templeton – writes in CAIA’s study “Crossing the Threshold – Mapping a Journey Towards Alternative Investments in Wealth Management” about the current state of the industry and its possible future.

Understanding the democratization of alternative investments is not just about analyzing figures; it is also about “understanding how this transformative trend alters capital raising norms, changes corporate DNA, and fundamentally redefines who can participate in the broad range of investment opportunities,” the expert argues.

The importance – she continues – lies not only in the figures but also in the empowerment of investors, the evolution of market dynamics, and the new frontiers of financial accessibility that drive innovation and change.

The growth of alternative investments has been one of the defining trends of recent years: between 2005 and 2023, alternative investment assets under management increased from $4 trillion to $22 trillion, representing 15% of global assets under management during that period.

One impact of the record growth in alternative investments, particularly private equity, has been a shift in capital raising patterns, according to Kaul. “Historically, most companies needed to access public markets to obtain the capital necessary to maintain their growth trajectory. With the abundant availability of venture capital and private equity funds, that pattern has changed,” she states.

Between 2000 and the end of 2020, the number of publicly listed companies decreased by 38%, from 7,810 to 4,8145. Meanwhile, the number of unicorns – private companies valued at over $1 billion – has increased: the first unicorn appeared in 2005 (Alibaba); twenty years later, there are more than 900.

The expert argues that the impact of this trend is that, proportionally, fewer small- or mid-cap companies are available in the public markets. “Whereas previously all investors could access these growth opportunities through the public markets, now only those investors who meet the requirements to invest in private funds have the opportunity to access them,” she states.

New Ways to Facilitate Access for Retail Investors

Now, finding ways to access a more democratized group of investors has become a new goal for alternative asset managers. Key firms have launched private wealth divisions and have added staff dedicated to working with advisor networks and creating new products that offer innovative structures with lower minimums, no deductions, simplified tax reporting, and regular liquidity windows.

However, the expert specifies that only a limited number of alternative firms have the resources or willingness to directly address the wealth management channel. To address this, many have opted to affiliate with broader asset management platforms and allow organizations that are already well established in the wealth channel to handle the logistics, regulatory compliance, and product creation necessary to reach these investors.

For their part – Kaul continues – many of the largest asset management platforms are open to these arrangements, as they see opportunities to better serve their clients and add new products that can help mitigate margin compression.

There have also been acquisitions among the main fund providers. For example, BlackRock announced in June 2023 the acquisition of European private debt firm Kreos, and in early 2024, Global Infrastructure Partners. Franklin Resources announced multiple acquisitions in the alternatives sector, including European private credit firm Alcentra (2022), secondary markets firm Lexington Partners (2021), private real estate manager Clarion Partners, and alternative credit manager Benefit Street Partners (2019). T. Rowe Price announced plans to acquire Oak Hill Advisors in 2021, and in that same year, Vanguard announced a strategic alliance with HarbourVest.

New Types of Alternative Products

In this context, the expert notes that various product structures are being explored to drive greater sales of alternative exposures to the wealth management channel. These include:

Feeder Funds. The most common approach in recent years has been to work with a technology intermediary to help create feeder funds capable of pooling an advisor’s clients to reach the minimum investment threshold required to subscribe to a private fund.
Interval Funds. Closed-end, illiquid alternative funds offered directly to investors and not publicly traded. Their price is calculated daily based on net asset value (NAV). Investors have the periodic opportunity to resell shares directly to the fund at NAV at specific intervals (e.g., monthly or quarterly).
Business Development Companies (BDCs). These closed-end capital structures are vehicles used to raise capital that will be allocated to lending to U.S. companies, public or private, with a market value below $250 million. These are generally small, emerging, or distressed companies overcoming financial obstacles. BDCs must distribute 90% of their income to shareholders to avoid corporate income tax. There are both listed and non-listed versions of BDCs.
European Long-Term Investment Funds (ELTIFs). Specifically designed to allow anyone to invest in unlisted European companies and long-term assets such as infrastructure. The original regulation came into effect in 2015 but was considered too restrictive, a situation that the ELTIF 2.0 regulation, activated in January 2024, could address.
Tokenized LP Shares. Tokenization is a new approach being used to explore the possibility of making alternative exposures more accessible to investors.

New Classes of Individually Focused Alternative Assets Are Also Emerging

In addition to the democratization of traditional alternatives, a new set of digital alternatives has also emerged, which “includes peer-to-peer lending platforms, equity, debt, real estate crowdfunding, fractional investments in collectibles, and cultural assets such as wine, art, and cryptocurrencies.”

What unites these offerings, according to the expert, is their go-to-market approach. “Instead of relying on a broker or wealth advisor, individuals can access the information they need to make their own investment decisions and execute them at will,” she explains, adding that while the types of products are very diverse, the platforms that enable access to all of them have several features in common:

Accessibility and Ease of Use. Individual investors can directly access each offering in this category via the internet or their mobile phones. Registration and account activation are done online and are usually completed within minutes.
Reduced Minimum Investment. Investment minimums are low so that individuals can participate.
Multiple Liquidity Options. Both liquid and illiquid assets are offered, from cryptocurrencies accessible 24/7, 365 days a year, to platforms like Moonfare, with $2.2 billion in assets under management, allowing individuals and their advisors to invest in selected private equity funds.

“In a sense, these new types of digital frontier offerings are becoming alternative markets. While retail versions of more traditional alternatives may be preferred by higher-net-worth individuals in advised portfolios, digital frontier assets offer almost all retail investors a way to diversify their portfolios,” Kaul states.

The expert concludes that managing these trends becomes “fundamental for investors,” as the rapid growth of alternative investments evolves and is reshaped by changes in global capital markets.

Furthermore, as changes in capital formation and value creation continue to test the significant relationship between public and private markets, “it is likely that the asset management industry will continue creating innovative ways to expand access for retail investors.”

U.S. Employment Data, Reliability of Statistics: The New Concerns of Analysts

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Pixabay CC0 Public DomainU.S. Stock Market

Data and More Data: The U.S. economy is the global benchmark for the financial industry because it is capable of producing a large amount of detailed and verifiable information. And four months after President Donald Trump launched the tariff war, analysts are beginning to have information that allows them to move out of uncertainty.

Trade negotiations, corporate earnings, employment data, GDP, inflation, and interest rates: the market is starting to find anchors, but shadows and doubts are also emerging regarding the reliability of official figures.

A Reliability Problem

Paul Donovan, Chief Economist at UBS, points to a new concern among investors in these turbulent months: “The revisions of last Friday’s (August 1) U.S. employment report coincided with the fragile narrative of the labor market. The situation remains ‘no hiring, no firing.’ The drop in manufacturing employment aligns with political uncertainty. The most concerning event on Friday was not the data, but President Trump’s dismissal of the Commissioner of the Bureau of Labor Statistics.”

Donovan believes that, globally, economic data has become less reliable in recent years. The drop in survey response rates, political polarization leading to biased responses, rapid structural economic changes that statisticians cannot keep up with, and the underfunding of statistical agencies have conspired to make revisions more extensive and frequent.

“Any suspicion of political interference in data means that investors will assume positive figures are manipulated, as in countries where GDP miraculously exceeds the official growth target year after year. The risks of policy errors increase. A gap between economic reports and reality complicates business planning. In the case of the U.S., the mere perception of political bias would further damage the dollar’s reserve status,” warns Donovan.

The Latest U.S. Employment Data

Seema Shah, Global Head of Strategy at Principal Asset Management, is beginning to see in the employment data the first repercussions of the tariff war: “It was not just a much weaker-than-expected employment figure, but the sharp downward revisions of the previous two months represent a significant blow to the perception of labor market strength. The most concerning aspect is that the negative impact of tariffs is just beginning to be felt, so it is likely that in the coming months we will see even clearer signs of a slowdown.”

David Kohl, Chief Economist at Julius Baer, analyzes the U.S. labor market, which confirms the weakness of the world’s largest economy. The June employment report suggests that the U.S. economy is cooling. The revisions of previous payroll growth figures were also significantly reduced, indicating lower job growth in April/May. Unemployment slightly increased to 4.2%, due to the slowdown in labor supply.

Jeffrey Cleveland, Chief Economist at Payden & Rygel, points out that the latest data on the U.S. labor market shows an unemployment rate still relatively low (4.2%), but job growth is weakening, and they believe the trend will continue.

“The drop in two-year Treasury yields indicates that investors have probably paid too much attention to inflation and too little to signs of a labor market slowdown, so now they have realized they need to rebalance their portfolios and extend duration,” says Cleveland.

Are We in the Early Stages of a Major Stock Market Rotation?

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The S&P 500, the most representative index of the U.S. economy, has accumulated a return of around 7.5% so far this year (data as of July 23, 2025). In the same period, the MSCI Emerging Markets has gained nearly 18%, the EuroStoxx 55 has advanced 8.5%, and the Topix has added more than 6%. This is a somewhat novel situation after the strong dominance of the U.S. stock market in recent years. These returns are accompanied by positive flows, particularly towards Europe, raising the question: Are we at the beginning of a major rotation?

Small Changes, Big Changes

“It is too early to talk about a major rotation, but smaller ones should occur,” says Benjamin Melman, Chief Investment Officer at Edmond de Rothschild AM. The expert cites several reasons that are holding back this major rotation, starting with the fact that “international diversification from the U.S. investor’s perspective has not been rewarded, as foreign assets have shown lower Sharpe ratios from a historical standpoint.” Melman also points out that “there is no recession in sight in the U.S.” and that the monetization of AI is not yet a market topic, “so U.S. investors are not in a hurry to invest abroad.”

That said, the expert does believe that U.S. investors “could slightly reduce their underexposure to some international assets” towards markets like Japan, Europe, or emerging markets. “Likewise, international investors overweighted in U.S. assets could also reduce their exposure to the U.S., as the American giant’s supremacy that prevailed at the beginning of the year has lost significant momentum,” he concludes.

The Moment for European Equities

Other experts consulted for this report are more categorical. For example, Sabrina Denis, Senior Portfolio Strategist at Janus Henderson, highlights that one of the “most notable surprises” of 2025 has been the strong rebound of non-U.S. stocks, evidenced by the 16% rise of the MSCI All Country World Index (ACWI) ex-USA (as of June 2025), compared to just over a 2% increase of the S&P 500 in that time, which for the expert “clearly indicates that a significant rotation towards developed markets outside the U.S. is already underway.” “This performance is not just a short-term anomaly but is supported by deeper structural changes and attractive valuations in non-U.S. markets,” she adds.

Víctor de la Morena, Chief Investment Officer at Amundi Iberia, summarizes the sentiment of many investors these days: “There is no doubt that the American economy remains the most important in the world; however, the European economy has gained relevance or ‘momentum’ recently thanks to economic recovery and European stimulus plans that are being increased and will serve as a major catalyst for the coming years, especially in infrastructure and defense.”

From Jupiter AM, European equity managers Niall Gallagher, Chris Legg, and Chris Sellers state that they see the possibility of “a shift in the economic order that could benefit European equities.” Specifically, the trio of experts believes that “structural changes in trade, capital allocation, and government policies are contributing to a long-awaited shift towards Europe.”

In particular, the managers point to the attractiveness of Southern European countries, a region they consider “is approaching the end of nearly two decades of deleveraging.” This implies that “consumer debt is low, the banking sector is healthy and capable of supporting expansion, and even immigration patterns are positive.” Additionally, as they indicate: “These countries have abundant and cheap energy, such as Spain, which has significant solar and onshore wind resources.”

This positive outlook on European equities is also shared by Andrew Heiskell, Equity Strategist at Wellington Management, and Nicolas Wylenzek, Macroeconomic Strategist at the firm: “European equities have entered a regime change that has recently accelerated, which could lead to the largest rotation since the global financial crisis.”

While the strategists warn that “this transition is not without challenges,” they also highlight Value segment stocks as the main beneficiaries, such as banks, telecoms, defense companies, or European small caps. They also believe that companies key to the energy transition with high entry barriers, such as network operators, as well as companies they refer to as “quality stable compounders”—that is, “resilient companies with consistent growth and strong balance sheets, whether Growth or Value style”—will benefit.

Conversely, they state that “the main losers could be those that benefited from globalization and a low-interest-rate environment.”

New Arguments

Mario González, Head of Capital Group’s business in Spain, Portugal, and US Offshore, points out that since “Liberation Day” on April 2, U.S. equities have shown a strong correlation with non-U.S. equities—something expected in a period of high volatility—but adds that “once things settle, the situation for non-U.S. stocks looks favorable.”

The expert indicates that the starting valuations of non-U.S. markets remain “much lower than in the United States.” He provides some data: on one hand, the MSCI ACWI ex-USA trades at 13 times forward 12-month earnings, while the MSCI EAFE (international developed) trades at 14 times, both near their 10-year averages and at a significant discount compared to the S&P 500, which trades at 20 times earnings.

Non-U.S. stocks are trading near their lowest level in 20 years relative to U.S. stocks.

That said, the expert from Capital Group recalls that the argument of low valuations has been brought up in recent years without any impact on the market, as those valuations have often been justified by the anemic earnings growth compared to the U.S. For González, what is different this time is the presence of new catalysts that “are changing the narrative for the first time in years”: fiscal stimuli in Germany, corporate reforms in Japan and South Korea, weakness of the U.S. dollar, signs of stabilization in China, and an improved political environment in Europe. “Additionally, in an environment of increased infrastructure spending, non-U.S. markets display greater diversity and have a higher weighting in heavy industry, energy, materials, and chemicals compared to the S&P 500,” he concludes.

HSBC Uruguay: The Acquisition Through Which BTG Pactual Will Enter the Country

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Completing the Southern Cone triad, BTG Pactual is preparing to plant its flag in one of South America’s main financial capitals: Montevideo. The company announced its entry into the Uruguayan market through the acquisition of HSBC‘s operations in the country, including retail, corporate, and investment banking businesses.

The Brazilian investment bank announced the deal—subject to customary regulatory approvals—via a press release, valuing the transaction at $175 million, including both capital and additional capital instruments. With this move, the firm aims to consolidate its regional presence.

HSBC Uruguay closed 2024 with five branches, $144 million in capital, and $47 million in additional capital instruments held by the HSBC Group, bringing total capital to $191 million, as detailed in the announcement.

On its institutional website, HSBC describes itself as the largest international bank operating in the Latin American country and the fifth-largest private bank in Uruguay by assets. It offers services in retail banking, corporate and SME banking, investment banking, and wealth management, as well as treasury and agricultural business services.

HSBC began its operations in Uruguay in 2000 with 60 employees, growing the operation to the 260 people it currently employs. In 2023, they inaugurated a new headquarters in the country, located in the World Trade Center Montevideo.

The arrival of BTG in Uruguay marks another step in the international expansion the Brazilian financial group has been pursuing in recent years.

International Reach

“The acquisition of HSBC in Uruguay is an important step in our internationalization strategy and strengthens our presence in the region. We want to be the bank for Latin Americans, offering the comprehensive range of services and renowned quality of BTG Pactual. We continue to grow solidly and consistently, and we will bring to the Uruguayan market solutions that combine security, technology, and excellence,” said Roberto Sallouti, CEO of the firm, in the press release.

The Brazilian firm has been expanding across the continent. Most recently, last year, they initiated the acquisition of the U.S. bank M.Y. Safra—which has offices in New York and Miami—with the goal of enhancing services for Latin American clients in the U.S.

Additionally, the firm recently founded BTG Pactual Europe, following the acquisition of FIS Privatbank, a bank based in Luxembourg. Thus, the firm strengthens its position in Europe, where it also maintains a physical presence in Portugal, Spain, and the United Kingdom.

The new Uruguayan operation will fall under the umbrella of BTG’s Latin American operations (excluding Brazil, naturally), led by partner Rodrigo Goes. This includes branches in Mexico, Colombia, Peru, Chile, and Argentina.

“We know this clientele well and are confident there is an opportunity to provide excellent services that meet the expectations of Latin Americans, now a global community. We believe there is synergy among the countries that will help strengthen the business environment across the continent, and we will also pay close attention to the particularities of the Uruguayan market, offering personalized services tailored to the needs of each client,” Goes stated in the release.

Semiannual Balance and Forecast Review: Focus on Active ETFs, Crypto ETFs, and ETFs With Private Assets as Underlying

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Exchange-traded funds (ETFs) are not slowing down. Zachary Evens, manager research analyst at Morningstar, is clear about this. And for good reason, as firms are launching new ETFs every day; investment flows continue to pour into these vehicles, and both investors and providers “are beginning to venture into previously unexplored territories.”

ETFs attracted $540 billion in new investment during the first six months of 2025, surpassing the total subscriptions of the first half of 2024, as the expert recalls.

Regarding products, by June of this year, 464 new ETFs had already been launched, quickly approaching the annual record of 726 launches. Among the most notable are the first public-private credit ETF, countless new buffer ETFs, covered call and active options ETFs, cryptocurrency ETFs, and even money market ETFs.

Faced with this dizzying array of figures in the industry, Evens takes stock: reviewing some of these developments and revisiting his predictions about ETFs made earlier this year. “So far, so good, but there’s surely much more to come in what has already been a hectic 2025 for ETFs,” he asserts.

Prediction 1: Active ETFs Outnumber Passive ETFs

This was inevitable. And it didn’t take long to happen. By the end of June, there were 2,226 active ETFs and 2,157 passive ETFs available to U.S. investors. Asset managers have fully embraced this tax-efficient instrument, meeting the demand of investors who continue to pour money into this sector.

However, there are nuances in the active ETF story: some of the most popular active ETFs are not so popular, Evens points out. Most of those that have taken off so far follow a quantitative or rules-based strategy. They are labeled “active” because they do not track an index. Examples include options-based strategies, such as defined outcome or covered call ETFs, or diversified quantitative strategies.

“Active ETFs are booming, but for now, most of the growth and interest have been centered on these types of strategies. It is likely that rules-based ETFs will continue to lead the charge in active ETFs,” the expert states.

Story 1: Private Assets ETFs

A significant trend in ETFs, according to the expert, is investment in private markets. Apollo has partnered with State Street to bring private credit to the retail market, and Vanguard is working with Wellington and Blackstone on the same—though Vanguard currently lacks a widely available public-private offering.

State Street‘s ETF, SPDR SSGA IG Public & Private Credit ETF (PRIV), was the first to hit the market in February this year. The launch was not entirely smooth, and doubts remain about the viability of illiquid assets in a liquid wrapper. But according to industry opinions, “more public-private products are clearly on the horizon.”

Investment inflows into the SPDR SSGA IG Public & Private Credit ETF have been moderate so far, but picked up in early July, “so it will be interesting to see how quickly competitors enter the market and how investors respond to this nascent segment.”

Prediction 2: Vanguard’s VOO Surpasses State Street’s SPY as the World’s Largest ETF

In 2025, the Vanguard S&P 500 (VOO) took only seven weeks to surpass SPDR S&P 500 Trust (SPY) as the world’s largest ETF. Vanguard’s fund started the year $40 billion behind SPDR’s, but now holds a $46 billion lead.

The expert believes the next question is whether the iShares Core S&P 500 (IVV) will surpass the SPDR S&P 500 Trust by the end of the year: it’s a very low-cost fund that isn’t structured as a trust. “After starting 2025 with a $38 billion gap compared to SPDR S&P 500 ETF Trust, the iShares Core S&P 500 ETF narrowed the gap to $14 billion by mid-year. This could be the tight race to watch,” he argues.

Story 2: Cryptocurrency ETFs

The fastest-growing ETF in history is the iShares Bitcoin Trust ETF (IBIT). Its assets have grown to over $75 billion after just a year and a half on the market. Its strong performance, crypto-friendly regulation, and adoption in model portfolios have helped this ETF reach its current level, the expert explains. But other cryptocurrency ETFs are also making headlines.

The Morningstar digital assets category has grown from $28 billion and 43 ETFs just two years ago to over $150 billion in 106 ETFs by the end of June 2025. However, this rapid growth “comes with froth,” and recent cryptocurrency ETF filings are drawing attention. Among the applications are several memecoin ETFs, including one that tracks the price of Pudgy Penguin NFTs.

“Bitcoin ETFs are here to stay, but time will test the resilience of the newcomers to the digital assets category,” concludes Evens.

Prediction 3: ETF Share Classes Become Reality

ETF share classes are on the verge of becoming a reality. They haven’t been approved yet, but Evens predicts this situation should change in the second half of this year. At the time of writing, 70 firms have applied for a Vanguard-style hybrid share class.

Firms are eager to offer this share class. However, Lan Anh Tran, manager research analyst at Morningstar, noted in her prediction that “once approved, they might not be the lifeline many expected” and that the share class “could create more problems than it solves.” Tran cites capacity constraints, SEC best interest regulation concerns, and capital gains complexities as reasons.

Nonetheless, ETF share classes could be a positive development for investors under the right circumstances. And until they are approved and launched, we won’t know their impact on each fund.

Story 3: Outcome ETFs Gain Ground

Following several proprietary launches in this area, BlackRock predicted in March that assets in outcome ETFs would grow to $650 billion by 2030. Outcome ETFs, as defined by BlackRock, include covered call ETFs, buffer ETFs, and some others. All of them use options to deliver a specific outcome.

Covered call ETFs fall under the derivative income category. These vehicles typically sell call options against a long position in an underlying asset, such as the S&P 500 index, to generate income. The largest ETF in the category—and currently the largest active ETF—is the JPMorgan Equity Premium Income ETF (JEPI), which contributed to the category’s boom and demonstrates that the prudent use of options can be an effective way to restructure risk and generate income, as Evens points out. By the end of June, there were 155 ETFs with $130 billion in the derivative income category.

Regarding covered call ETFs on individual stocks, Evens explains that their sky-high yields attracted billions in inflows, “but funds like these often end up on our list of ‘worst new ETFs of the year’ for sacrificing total returns in favor of income while increasing risk and costs.”

Buffer ETFs are the most explicit outcome-based strategy, offering investors a defined range of both losses and gains. Several firms even offer ETFs with 100% downside protection: they should not lose money before fees, but only gain up to a maximum cap, usually between 8% and 10% annually.

The defined outcome category, which houses buffer ETFs, has evolved from a simple buffering strategy to much more complex products in just a few years. This new category now holds nearly $70 billion in assets spread across 408 ETFs, “the largest of all categories.”

Defined outcome and derivative income are among the fastest-growing categories, thanks to ETFs. “It is clear there is investor interest, and issuers have been more than willing to offer new products. However, ETFs in these fastest-growing categories remain quite expensive compared to traditional index funds and even many actively managed ETFs. There is room for costs to come down as the sector matures,” Evens asserts.

The New World Order of International Trade Shaped by Trump Arrives

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The President of the United States has made a final plot twist in his tariff game. Trump has signed the executive order that reconfigures international trade through the imposition of new tariffs, which will take effect on August 7, six days later than expected. In general terms, the new minimum rate for nations with which the United States maintains a negative trade balance has been set at 15%, according to the White House.

In this regard, about 40 countries are subject to the 15% rate, including Costa Rica, Ecuador, Venezuela, and Bolivia. Meanwhile, in the case of those with which the United States maintains a positive balance, the tariff will be 10%. However, there are also levies above 30% for some countries that have not reached trade agreements with the U.S., including Canada (35%), Switzerland (39%), Algeria, Bosnia, Syria, South Africa, Serbia, Myanmar, Libya, Laos, and Iraq. In the case of Brazil, Trump confirmed a 50% tariff, accompanied by sanctions against the Brazilian Supreme Federal Court, in retaliation for the trial against former president Jair Bolsonaro. As for Mexico, he has granted another 90-day extension to prolong their negotiations.

According to Yves Bonzon, CIO of Julius Baer, Donald Trump is determined to increase public revenues through higher tariffs, and this is a critical aspect of his economic agenda to achieve a rebalancing of the U.S. economy and move away from chronic deficits. “Part of the U.S. master plan to rebalance global trade has China as an implicit target. Beijing has made it very clear that any sovereign state is free to conclude a bilateral trade agreement with Washington, but it cannot do so at the expense of China‘s interests. If other states end up exempting U.S. imports from tariffs, it will be hard for the U.S. administration to argue that it does not benefit from a most-favored-nation clause,” Bonzon notes.

From the perspective of Mark Dowding, BlueBay CIO of RBC BlueBay Asset Management, Trump has obtained virtually all the concessions he expected in the trade negotiations held so far. “Our analysis leads us to conclude that the U.S. has increased its average global tariff rate to approximately 18%. Based on this premise, we project annual tariff revenues of around $450 billion, compared to $77 billion in 2024; an increase equivalent to 1.25% of GDP. This revenue volume should help slightly reduce the U.S. fiscal deficit, bringing it below 7% of GDP next year,” Dowding explains.

Asia and Europe: Market Openings

Following the official announcement, Trump celebrated his new trade policy on the social network Truth with a clear message: “A year ago, the U.S. was a dead country, now it is the most attractive in the world.” For their part, both Asian and European markets opened slightly lower, showing that uncertainty remains entrenched in the investor community. In Asia, the MSC Asia-Pacific fell 0.4%, the Kospi 1.6%, and the Nikkei 225 0.6%. According to experts, these declines reflect the announcement of new tariffs ranging from 10% to 41% on imports from India, Taiwan, Korea, and other countries.

In Europe, the main indices also reacted with “moderate negativity”: the DAX and CAC fell 1.6%, and the FTSE 100 dropped 0.7%. It is worth recalling that the trade agreement between the U.S. and the European Union had boosted the STOXX 600 by 0.7% on July 28, but the August 1 decision reversed that slight optimism.

“Although the agreement between the U.S. and the EU avoided a harmful trade war, its real effects remain to be seen. While progress was made in strategic sectors and energy cooperation was strengthened, the pact leaves several structural issues unresolved. Still, in a world marked by geopolitical fragmentation and economic risks, this understanding represents a diplomatic reprieve. It will be crucial for both parties to continue working on a joint agenda that prioritizes stability, fair trade, and shared innovation,” says Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS.

In Bonzon’s view, the markets have been pricing in the trade war for some time. “Collective wisdom is probably right in asserting that the trade war will not occur. Nevertheless, the rest of the world has an opportunity here to move forward and continue fostering a friendly trade framework,” he comments.

Investors Prepare

The new direction of U.S. trade policy is a clear example of how the world is transforming at an unprecedented speed. “While the global economy moves toward decarbonization to achieve the goal of net-zero emissions, trade wars are slowing globalization, demographic change is causing a shrinking labor force, and digitalization is advancing at a dizzying pace. We are now living in the era of geoeconomics. Although the idea of using economic tools for political purposes is not new, it is hard to find another moment in history when foreign policy, security, and the economy have been so intertwined and acting simultaneously with such intensity. And, logically, this has a direct impact on both economies and markets,” argues Hans-Jörg Naumer, Global Head of Capital Markets & Thematic Research at Allianz Global Investors.

According to the asset manager, for investors, this means ensuring that their investments are well diversified in this constantly changing “multiverse” of opportunities and being prepared to adjust their portfolios. “The challenge is not only to rebalance a portfolio to reflect these changes but also not to lose sight of diversification. In fact, a well-known saying, deeply rooted in portfolio theory, makes perfect sense here: don’t put all your eggs in one basket,” says Allianz GI.

In their view, multi-asset solutions could play a determining role here. “The logic is simple: why not design a portfolio tailored to the investor’s individual risk appetite that combines different asset classes? And it doesn’t have to be limited to just stocks and bonds,” they argue.

Serge Weyland: “We Must Think of Regulation as a Way to Empower Investors”

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Photo courtesySerge Weyland, CEO of the Luxembourg Investment Fund Association (ALFI)

Assets in Luxembourg-domiciled investment funds — including UCITS and AIFs — reached €7.2 trillion at the end of April 2025, according to the latest figures published by the Luxembourg Investment Fund Association (ALFI). “We are witnessing strong inflows into both UCITS and alternative funds, but above all we are observing growth in the active ETF industry, an area where many managers have started to launch and market products,” highlights Serge Weyland, CEO of ALFI, when asked about the health of the industry.

In his view, the two major trends currently shaping the European fund sector are precisely active ETFs and alternative funds. In both cases, he acknowledges that Luxembourg is playing an increasingly prominent role. “I believe Luxembourg is the home of actively managed funds, whether liquid or illiquid, and whether we’re talking about traditional fund structures or ETFs. The regulation and transparency that characterize the country have been key to its leadership,” Weyland emphasizes.

ETFs and Alternatives: Growth Trends

In addition to this reflection on the country’s relevance, Weyland believes both trends will continue to grow. “It’s an emerging trend. We expect more and more asset managers to view ETFs as a distribution channel for actively managed strategies and to use platforms to bring them to investors. We already saw this with smart beta or beta-plus strategies, as well as systematic index-based strategies, which also opted for the ETF format,” he notes based on his experience.

Regarding private investments, Weyland points to the strong growth seen in the Luxembourg industry, which has grown from €2.5 trillion to €7.5 trillion in alternative fund assets. “This is the area where we’ve seen the most growth, and we expect it to continue. Of course, the interest rate hikes in the eurozone over the past two years made these assets less attractive, but the current rate-cutting cycle has turned the outlook around. After a dip in which the number of fund launches fell, ELTIFs are gaining strength in response to growing investor demand,” he comments.

Regulation: A Maze to Simplify

In this growth context comes the European Commission’s message on the need to simplify regulation to move toward a more unified, efficient, and competitive market — and to mobilize European investors. Given Weyland’s professional background, the question is inevitable: is this really what the industry needs? His response is direct: “Yes, I believe there are several areas where simplification is important — not only for the industry but also for investors.”

According to his assessment, one of the main challenges facing the European Commission is that European households are not investing — in part because legislation makes it difficult for them to invest and receive advice. “I think we must understand regulation not as an obstacle for investors or as excessive protection, but as a way to empower investors. I believe all regulatory developments around cost transparency are good, but I think we’ve gone too far, restricting their freedom to take risks,” he argues. He also points out that European regulation tends to view risk negatively: “We need a holistic view of risk that takes into account timing and investment horizon for decision-making.”

Another area where regulatory simplification could be very beneficial is the work of advisors. “There’s a lot of complexity in the investment offering process. Other countries, such as the United Kingdom, are already addressing these challenges, and we could take inspiration from them.”

In his view, this simplification will benefit the European investment product — the best example being UCITS funds — and the European industry, which has reached €23 trillion in Europe-domiciled funds, of which €5 trillion come from non-European investors. “We export far more funds than the United States, and regulation should be a catalyst for greater competitiveness — not the opposite.”

The best example is the recent revision proposed by ESMA on UCITS eligible for advisors. It suggests a systematic review of UCITS exposure, which would allow, for example, investments in real asset funds or commodity indices via total return swaps. “If this were to be implemented, it would be very unfortunate, because these are precisely the solutions that retail and institutional investors have used for many years to diversify their exposure,” argues the CEO of ALFI.

CMU and RIS: Are They Aligned?

In this regard, one of the debates heard in the industry is whether the Capital Markets Union (CMU) and Retail Investment Strategy (RIS) proposals are compatible. ALFI believes both should be aligned and, in Weyland’s words, “the CMU should consider pension systems as key components of the new European financial model,” given the major sustainability challenge faced by pension systems in countries such as Spain, Luxembourg, France, Germany, and Italy — and the opportunity presented by the so-called second pillar.

ALFI advocates for occupational pension plans — under the second pillar — with automatic enrollment, transparency, efficiency, broad availability, and choice among multiple providers. It also recommends a European tool to track first, second, and third-pillar pensions, providing citizens with a clear view of their future retirement.

“In many pension systems, this second pillar is completely outdated and ineffective due to poor design. I believe the European Commission can truly help Member States redesign this second pillar of their pension systems. Some countries have successfully implemented a second pillar that works and encourages investor participation, such as Sweden, Denmark, Canada, or Australia,” Weyland concludes, offering another perspective on the debate.

Two Alternative Asset Managers and a Dozen Funds Receive Green Light to Access Chilean AFPs

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The list of instruments in which Chilean pension funds can invest continues to grow, and July was no exception. The most recent meeting of the Risk Rating Commission (CCR) — the entity that determines which asset managers and funds can offer their strategies to the AFPs — gave the green light to two alternative asset managers and a dozen funds, including two ETFs.

According to a statement, the entity’s latest meeting — held this week — resulted in a series of approvals, including the two alternative asset managers, which were cleared for investment vehicles and co-investment operations for a specific asset.

The U.S.-based Greenbriar Equity Group received approval for private equity. This is a specialized manager with a strong focus on growth. “We don’t invest in trends or market cycles; we invest in great companies and management teams in sectors where we’ve spent our entire careers,” is how they describe themselves on their institutional website. In terms of sectors, they are primarily dedicated to companies involved in the supply chain and business services — such as logistics, specialized distribution, and transportation, among others — as well as advanced manufacturing firms, including those in aerospace, defense, and vehicles.

In the case of Sweden’s Niam AB, although the firm offers a broad range of strategies across the alternatives spectrum — including real estate, infrastructure, and credit — the CCR approval involves real estate investments. In this segment, the firm is particularly active in the European market, investing in assets across all sectors in Sweden, Norway, Finland, Denmark, and Poland.

Liquid Asset Funds

However, the investable universe for the AFPs expanded not only in the area of illiquid assets this month. A dozen funds — including a couple of index strategies — were also added to the list, brought in by a handful of international asset managers.

In terms of mutual funds, the CCR approved two Morgan Stanley vehicles, both focused on Asian equities: the Indian Equity and Japanese Equity strategies; and four UBP Asset Management (Union Bancaire Privée) fixed income funds: Dynamic US Dollar Bond, Global High Yield Solution Extended Duration, Hybrid Bond, and Medium Term US Corporate Bond. In addition, they added the European equity strategy Tocqueville Value Euro ISR, managed by LBP AM (formerly known as La Banque Postale Asset Management).

Pictet completes the list of newly incorporated mutual fund shares, with three thematic equity strategies: Quest AI-Driven Global Equities, Quest Europe Sustainable Equities, and Quest Global Sustainable Equities.

On the side of index-tracking vehicles, two Franklin Templeton ETFs were also approved: Franklin FTSE India UCITS and Franklin S&P 500 Paris Aligned Climate UCITS.

iCapital and Boreal Announce an Alliance to Expand Access to Institutional-Quality Alternative Assets

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Pixabay CC0 Public Domain. The Road to an Effective Collateral Management Program

iCapital and Boreal Capital Management AG (Zurich) and Boreal Capital Management LLC (Miami), subsidiaries of the MoraBanc Group, have announced in a statement a global collaboration aimed at expanding cross-border investment solutions. This alliance builds on the successful use of iCapital’s Marketplace by Boreal Miami since 2021 and now includes Boreal Zurich’s access to Luxembourg-domiciled funds for qualified Swiss investors.

This expansion is especially relevant for Latin America, where Boreal Miami serves a growing base of private clients and family offices seeking diversified, institutional-quality investment opportunities. The alliance underscores both firms’ commitment to transparency, innovation, and client-centric wealth management.

We believe this story will resonate with your audience, particularly given the increasing demand for access to sophisticated investments in Latin America. I would be happy to arrange interviews with executives from iCapital or Boreal, or provide additional information.

“This agreement represents a key strategic step in our commitment to offering our clients access to top-tier alternative investment solutions, always with the highest level of transparency and regulatory rigor,” stated Joaquín Francés, CEO of Boreal Capital Management LLC.

“We are pleased to expand our relationship with iCapital, a step that will further strengthen our global offering and enable us to continue providing our clients with access to high-quality investment opportunities,” added Jaime Moreno, CEO of Boreal Capital Management AG.

“We are excited to deepen our relationship with Boreal Capital Management and support their global expansion into alternatives,” stated Wes Sturdevant, Head of International Client Solutions for the Americas at iCapital.

With over $4 billion in assets under management and a team representing fifteen nationalities and ten languages, Boreal offers a unique combination of global reach and local expertise. iCapital, for its part, manages $232 billion in alternative platform assets and provides AI-driven solutions that streamline the investment lifecycle—from onboarding and regulatory compliance to reporting and portfolio integration.