Institutional Investors Ditch Gold ETFs for Bitcoin (BTC)

By Bhushan Akolkar
November 8, 2020 Updated November 8, 2020
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October 2020 has been an absolute action-packed month for Bitcoin investors. The rally continued ahead in the first week of November as the BTC price reached close to $16,000 levels hitting a new 2020 high. Citing recent data from JPMorgan, Grayscale managing director Michael Sonnenshein said that Bitcoin clearly overshadows the demand for Gold ETFs.

Digital asset manager Grayscale registered major institutional money inflow for its Bitcoin Trust fund. After attracting over $700 million with its Bitcoin Trust Fund during Q3 2020, Grayscale attracted even more in the month of October. It has also clocked a record high of $7.3 billion of assets under management (AUM) with the Bitcoin Trust alone holding over $6 billion.

Looking at the institutional rush to buy Bitcoin (BTC), Sonnenshein said:

“This contrast lends support to the idea that some investors that previously invested in Gold ETFs such as family offices, may be looking at Bitcoin as an alternative to gold.”

Bitcoin Consolidates Its Position Against Gold

The Bitcoin price rally over the last few months has helped it consolidate its positions against the yellow metal. Meaning more ounce of Gold is now available for 1BTC than earlier. This clearly goes to show that with the global economic uncertainty institutional players are preferring BTC over gold. As per popular market analyst Plan B, crypto king Bitcoin further extended its dominance over Gold during October.

With the recent moves in the Bitcoin price, investors have gone ultra-bullish for its long-term prospects. Over the last week, there has been a massive liquidation of BTC shorts registered across multiple exchanges. Interestingly, while analysts are predicting Bitcoin to cross its all-time high of $20,000 by the next year, PlanB’s stock-to-flow model shows a massive outbreak.

In his latest tweet, PlanB says that as per its S2F model, Bitcoin (BTC) price could be anywhere between $100K-288K before Dec2021. PlanB says that as per new data, the BTC supply shortage is real and will only increase as more institutional players chip in. While PlanB’s prediction might look exaggerated looking at the time frame, another technical chart goes to show that Bitcoin can easily trade between $25,000-$50,000 in the next few months.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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