Bitcoin ETF AUM Will Surpass Gold ETF By Year-End, Says Expert

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As a seasoned crypto investor with over two decades of experience in traditional finance and a keen interest in digital assets, I find myself intrigued by the recent surge of Bitcoin ETFs and their potential to overtake Gold ETFs by year-end.

As a researcher, I’ve observed a significant surge in investments into Bitcoin Exchange-Traded Funds (ETFs) over the last fortnight, with BlackRock’s IBIT leading the pack. Last week, these Bitcoin ETFs managed assets exceeded $100 billion, sparking speculation among market analysts that they could surpass Gold ETFs by the end of the year. This prediction hinges on the continuation of these inflows and the price of Bitcoin reaching new peak levels.

Can Bitcoin ETFs OverTake Gold ETFs By Year-End?

According to industry specialist and ETF Store leader Nate Geraci, there’s a chance that Bitcoin ETFs could surpass Gold ETFs in value by the end of this year. In just under a year since their introduction, the market for Bitcoin exchange-traded funds has already expanded to a staggering $100 billion.

Conversely, the value of the Gold Exchange-Traded Fund (ETF) market reached an impressive $271 billion by the end of September, according to the World Gold Council. Interestingly, while Bitcoin ETF investments increased significantly in November and December, this was the first time in six months that Gold ETFs experienced outflows. As a result, the difference between these two markets has been rapidly decreasing.

Geraci highlighted that whether his forecast would materialize or not depends significantly on how the values of Bitcoin and gold will fare over the next few weeks. Furthermore, he emphasized that the introduction of Bitcoin ETFs is remarkable given that physical gold ETFs were established about two decades prior.

Since Thanksgiving in 2024, BackRock’s iShares Bitcoin ETF (IBIT) has amassed more than $4 billion in investments, making it the second-most successful ETF launch of that year. On Friday alone, IBIT received an additional $393 million, bringing its total inflows to nearly $36 billion.

BTC Can See A Short Squeeze

Increasing scarcity of Bitcoins may lead to a possible increase in price, as suggested by a recent study by 10x Research. The report points out significant Bitcoin withdrawals from exchanges, which are being fueled by increasing interest from Bitcoin ETFs and companies such as MicroStrategy that are amassing Bitcoin. Investors will closely watch the FOMC meeting next week to determine whether Bitcoin’s price will reach new record highs.

For approximately one month, a total of around 124,000 Bitcoins have been removed from cryptocurrency exchanges, indicating a decrease in available liquidity. Notable exchanges such as Coinbase, Binance, Gemini, OKX have experienced BTC withdrawals that account for 7-10% of their total reserves.

Should these tendencies continue along with strong market demand, there’s a possibility of a significant shortage in Bitcoin supply emerging. Such a situation might become even more pronounced due to the arrival of Bitcoin ETF options, which could lead to gamma squeezes, intensifying the existing price pressures.

Currently, at this moment, Bitcoin’s price is increasing by 2% and sitting at approximately $101,953. This has also caused its market capitalization to surpass the $2 trillion mark. According to data from Coinglass, the total liquidations over the past 24 hours amount to $38.6 million, with a significant portion being short positions totaling around $26.6 million.

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2024-12-14 10:14