Bitcoin ETFs Can Overtake Gold ETFs This Summer If This Happens
Highlights
- Bitcoin ETF inflows challenge the gold hegemony going ahead.
- Bitcoin and Gold both hit all-time highs causing confusion regarding investors' risk appetite.
- Gold ETFs witnesses consecutive outflows every week since the start of 2024.
Bitcoin and Gold are once again in the limelight as both asset classes hit fresh all-time highs on Tuesday, March 5. On the other hand, the massive inflows into spot Bitcoin ETFs continue with daily trading volume skyrocketing all the way to over $10 billion.
Bitcoin ETFs vs Gold ETFs
Bloomberg’s Senior ETF strategist Eric Balchunas highlights the impact of massive inflows into Bitcoin ETFs in a very short time of their launch. In a groundbreaking development within the cryptocurrency market, the ten spot Bitcoin Exchange-Traded Funds (ETFs) have surged past the $50 billion mark in assets.
This monumental achievement comes just seven weeks after the ETFs were introduced, initially launching with under $30 billion in assets. Approximately $8 billion of the total assets are attributed to investor flows, with the remainder stemming from the appreciating value of Bitcoin itself.
Balchunas added that if these ETFs maintain their current momentum, adding $10 billion in assets per month—a prospect deemed both extraordinary and plausible, depending upon Bitcoin’s price trajectory—they could potentially surpass the assets under management of gold ETFs by this summer.
However, the comparison to gold ETFs introduces a significant variable. While gold has experienced a notable rebound in value recently, evidenced by a surge in prices, the associated investor interest seems lacking. Notably, the largest gold ETF, $GLD, has witnessed consecutive outflows every week since the beginning of the year, reports Blachunas.
Both Bitcoin and Gold to Benefit from Fed Policy
New record highs for both Bitcoin and gold are causing some confusion regarding the risk appetite in global markets. Bitcoin has surged nearly 50% this year, partly due to increased investment in newly launched US exchange-traded funds dedicated to the digital currency.
On the other hand, the rise in gold prices may suggest a defensive stance by investors amid worries about geopolitical tensions or potential corrections in global stock markets following a prolonged period of growth. Speaking to Bloomberg, Chris Weston, head of research for Pepperstone Group Ltd. said:
“Gold has been hugely traded overnight, the volumes are massive — I’ve had a lot of client calls asking what is happening”. Fast-money investors “are buying the momentum and that is what we are seeing in Bitcoin as well.”
Both Bitcoin and gold are seen as potential beneficiaries of anticipated looser monetary policies. Market swaps indicate a 62% probability of a Federal Reserve interest-rate reduction in June, up from 58% at the close of February.
- ‘Great Progress’: Cardano Founder Shares Update After CLARITY Act Roundtable
- Jerome Powell Signals No Rush to Cut Rates, Bitcoin Falls
- FOMC Meeting: Fed Makes First Rate Cut of the Year, Lowers Rates by 25 Bps
- “Beyond a Centralized Exchange” Bitget CEO Unpacks Universal Exchange Vision on 7-Year Anniversary
- Breaking: CME Group to Launch Solana and XRP Futures Options as Institutional Demand Grows
- Toshi Coin Gains 57% in One Day: What’s Driving the Sudden Upside?
- Shiba Inu Price Set to Soar as Exchange Reserves Dive Amid SHIB ETF Chatter
- Pepe Coin Price Prediction as Whale Moves $25M From Robinhood- Is a Breakout to $0.00002 Next?
- XRP Price Prediction as Market Longs Hit 78% amid VivoPower Treasury Expansion Launch — Is $4 Next?
- SHIB Price Forecast: Taker Buys Lead as Developers Counter Shibarium Exploit
- Solana Price Set for a 25% Jump as Open Interest Nears a $20 Billion Milestone
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Premium Partners
