Market Expert Predicts Bitcoin ETFs To Surpass Gold ETFs, Here’s When

by

As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed the evolution of various investment products and their impact on the global economy. The unprecedented growth of Bitcoin ETFs within just three years is nothing short of astonishing. Compared to gold ETFs, which took five years to reach the same level of net inflows, this rapid ascent highlights a tectonic shift in investor sentiment towards cryptocurrencies.

From the time they were introduced in January, Bitcoin Spot ETFs have amassed over $20 billion in total net investment – making it the most prosperous ETF launch to date.

It’s significantly faster than the five-year period required for gold ETF market inflows to reach their current magnitude, and some analysts predict that Bitcoin ETFs could overtake spot gold ETFs within the coming years.

Bitcoin ETFs Hit $20 Billion, Fastest Growing Ever!

For the first time, the combined value of Bitcoin ETF investments surpassed $20 billion, a significant milestone demonstrating the expanding curiosity and endorsement of Bitcoin within the investment sector. In recent days, investments have been pouring in at an accelerated pace, indicating robust demand from both individual and institutional investors.

This establishes a record for Bitcoin ETFs as the swiftest-expanding ETFs in history, signifying a significant shift in the investment landscape. Many analysts suggest that this rapid growth might continue due to an increasing number of major traditional financial institutions entering the cryptocurrency market.

As stated by Nate Geraci, President of the ETF Institute, when looking at the cumulative net inflows, gold ETFs were launched back in 2004, while spot Bitcoin ETFs will debut in 2024. Despite gold having a 20-year advantage, Bitcoin ETFs may quickly overtake or even surpass gold ETFs within the coming years.

Here’s a chart for you…

Cumulative net flows into physical gold ETFs vs spot bitcoin ETFs.

Gold ETFs launched in 2004.

Bitcoin ETFs in 2024.

20 years of experience edge for Gold ETFs, yet I wouldn’t rule out Bitcoin ETFs overtaking them within the next two years.

via @Todd_Sohn

— Nate Geraci (@NateGeraci) October 18, 2024

Eric Balchunas, who works as a senior ETF analyst at Bloomberg, shared on social media that the record-breaking $65 billion in total assets managed by Bitcoin ETFs reached this milestone due to a significant week marked by over $1.5 billion in fresh investments. This suggests strong investor interest in Bitcoin ETFs.

Market Expert Predicts Bitcoin ETFs To Surpass Gold ETFs, Here’s When

Since their launch on January 11, they’ve managed to accumulate a total of $20.26 billion through investments, marking a significant achievement within the sector.

Market Expert Predicts Bitcoin ETFs To Surpass Gold ETFs, Here’s When

BlackRock’s Bitcoin ETF Sees Massive Inflows

Over the last four days alone, the same 11 ETFs-ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton-saw a net inflow of roughly $1.64 billion. Such robust demand is underpinned by increasing mainstream acceptance and institutional interest in Bitcoin as an investable asset.

On October 16th, BlackRock experienced a significant increase in investments totaling $393.4 million, marking the highest daily influx since July 22nd when they recorded an inflow of $526.7 million. This surge indicates that investors are becoming more optimistic about Bitcoin’s potential, as prominent asset managers like BlackRock are backing these cryptocurrency products.

Market Expert Predicts Bitcoin ETFs To Surpass Gold ETFs, Here’s When

Also, recently, Quantity Funds announced the launch of a US Bitcoin and Gold ETF, which will provide investors exposure to these unique assets in one single wrapper.

Experts from Standard Chartered predict that Bitcoin might return to its previous high of around $73,800, particularly in light of the approaching U.S. presidential election.

They describe one reason Trump’s re-election might produce a friendly environment for Bitcoin: he is friendly toward cryptocurrency. This momentum for spot Bitcoin ETFs illustrates a more significant trend of cryptocurrency gaining more traction as an asset class and driving further market development. At the time of writing Bitcoin price was up by 2% to $68,640.

Institutional Bitcoin Ownership on the Rise

The study conducted by Charles Schwab in 2024 reveals that approximately two out of three Millennial ETF investors are considering investing in digital assets like cryptocurrency over the upcoming year. This suggests a rising curiosity among younger generations towards cryptocurrencies as potential investment opportunities, as they tend to be receptive to experimenting with novel financial instruments.

Eric Balchunas recently underscored the importance of outflows from Bitcoin ETFs, particularly when considering the Grayscale Bitcoin Trust (GBTC) in the analysis. He suggested that this inclusion strengthens their growth and eliminates any potential objections by critics. He highlighted the relevance of this measurement, explaining that it provides a transparent view of the overall performance without offering room for critics to question the data.

At present, US Bitcoin Exchange-Traded Funds (ETFs) oversee approximately $65 billion in assets and collectively own roughly 951,000 Bitcoins – a record-breaking figure. Balchunas noted that this amount is nearly 86% of the estimated 1.1 million Bitcoins associated with Satoshi Nakamoto, the anonymous inventor of Bitcoin.

Investments into these ETFs significantly boost their overall value and affect the quantity of Bitcoin circulating in the market. It’s becoming more evident that ETFs are centralizing ownership of the Bitcoin asset, as large institutional investors such as BlackRock continue to amass Bitcoin holdings.

The increasing interest in Bitcoin Exchange-Traded Funds (ETFs) suggests they’ll have a larger influence on the overall market. These funds offer a controlled investment option, attracting both individual and institutional investors. This growing trend highlights the crucial part Bitcoin ETFs play in predicting the future of crypto investments, as more investors look for secure and regulated paths to invest in digital currencies.

Read More

2024-10-18 19:44