The rise of Bitcoin ETFs has caught the attention of analysts, with Bloomberg predicting that Bitcoin ETFs could potentially become larger investment vehicles than gold ETFs in as little as under 24 months. According to Bloomberg ETF analyst Eric Balchunas, Bitcoin ETFs have seen an influx of over $5 billion in inflows following their launch, while gold ETFs have faced significant outflows in recent weeks.
Currently, Bitcoin ETFs hold over $37.3 billion in assets, while gold ETFs hold roughly $88 billion, with the SPDR Gold Shares (GLD) fund being the largest contributor. Despite the significant difference in assets, Bloomberg analysts believe that Bitcoin ETFs could surpass gold ETFs in size within the next two years.
Gold ETFs have been struggling to maintain their assets, with $3.6 billion in net outflows since January 11. The stagnant price of gold, hovering around $2000 per ounce, has not helped in attracting new investments, unlike Bitcoin, which has seen a 28% surge in value over the same time frame.
Many analysts predict that Bitcoin ETFs could drive the price of Bitcoin to over $150,000 in the next 12 to 24 months, further increasing the assets under management (AUM) of existing Bitcoin ETFs managed by BlackRock and Fidelity. This could potentially make Bitcoin the largest ETF commodity in the market.
In light of Bitcoin’s success against gold, Balchunas pointed out that BlackRock, which manages the IAU ETF, may not be as thrilled by the rise of Bitcoin ETFs as other market participants. However, he acknowledged that in the grand scheme of things, BlackRock is still benefiting from the overall growth in the ETF market.
Bitcoin is often compared to gold as a hedge against monetary debasement due to their limited supply. As investors seek alternative assets to safeguard their wealth, Bitcoin’s surging popularity as a digital store of value is challenging the traditional notion of gold as the ultimate safe haven asset.
Overall, the rise of Bitcoin ETFs presents a new and exciting opportunity for investors looking to diversify their portfolios and capitalize on the potential growth of the cryptocurrency market. As the competition between Bitcoin and gold intensifies, only time will tell which asset will emerge as the preferred choice for investors seeking stability and long-term growth in their investments.
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