Bitcoin ETF Inflows Show Gold Disruption Can Come Sooner Than Expected

The inflows in spot Bitcoin ETF have surged once again in February clocking nearly $500 million a day before. Interestingly, the pace of inflows has caught investors’ attention with many of them expecting that Bitcoin would eat into Gold’s market share sooner than expected.

Bitcoin (BTC) – A sound Money Asset

According to insights provided by on-chain data provider Checkmate, Bitcoin is steadily closing the gap on Gold, traditionally regarded as the premier sound money asset.

With approximately $14 trillion in total above-ground Gold stock, of which 38% is considered investment grade, including $3.0 trillion in Bullion and ETFs, along with $2.36 trillion held by Central Banks, Gold has long held sway as a safe haven asset.

However, Checkmate’s analysis indicates that Bitcoin’s presence in this investment-grade sound money market cap is rapidly expanding. Currently representing 15% of the total investment grade market cap, BTC’s growth trajectory suggests a promising future in the realm of sound money assets.

In a notable observation, analyst Bitcoin Munger highlighted the significant inflows into not one, but two Bitcoin Exchange-Traded Funds (ETFs) in the past week. Interestingly, the analyst also pointed out a striking absence of Gold in the top 20 assets with strong inflows. This observation underscores the evolving landscape of traditional safe-haven assets in the face of Bitcoin’s ascent.

Expressing a perspective on the future, Munger suggested that BTC’s disruption of gold could occur at a pace faster than anticipated by proponents of the precious metal, commonly referred to as goldbugs.

BTC Price Action

Following the release of the US CPI data for the month of January, the Bitcoin (BTC) price took a small dive but continues to hold firmly at $49,500. Also, the strong Bitcoin ETf inflows highlight that institutions remain interested in this asset class as Bitcoin continues to mature as an asset class.

Popular crypto analyst Michael van de Poppe appreciated the strong inflow into Bitcoin ETFs. However, he said that there’s no guarantee that the inflows would continue to grow from here. Poppe added that as long as the Bitcoin price maintained $46,000, it would continue to go up.

#Bitcoin correcting slightly after CPI came out (higher than projected).

Inflow is great, but it's not a guarantee that it will go up endlessly.

As long as #Bitcoin stays above $46K, trend remains up.

Good sidenote: ETH/BTC bouncing upwards. pic.twitter.com/gK3j54iGPi

— Michaël van de Poppe (@CryptoMichNL) February 13, 2024

As per Poppe, the BTC price can rally to $55,000 during the pre-halving rally. Another market analyst Rekt Capital believes that the pre-halving downside is over, and BTC has already transitioned into the pre-halving rally phase.