Bitcoin ETFs gradually catching up with gold funds Will Bitcoin surpass gold?

Author: Ben Strack, blockworks Translation: Shan Oppa, Golden Finance

Bitcoin funds could one day exceed $90 billion in assets, although industry observers note that the opposite flow trend may slow over time gold ETF market.

As Bitcoin ETFs continue to see inflows about six weeks after their launch, investor money has already exited gold funds - despite what some believe This fluid relationship is unlikely to last.

While analysts predict that Bitcoin ETF assets may one day exceed those in gold funds, industry observers point out that the two industries are not directly related. .

The 10 spot Bitcoin funds listed on January 11 have so far seen net inflows of approximately $5.5 billion.  

Meanwhile, according to ETF.com data, since that date, The largest gold ETFs—State Street Global Advisors’ SPDR Gold Shares (GLD) and BlackRock )'s iShares Gold Trust (IAU) suffered net outflows of approximately $2.7 billion and $350 million, respectively.  

Bloomberg Intelligence analysts Eric Balchunas and Andre Yapp ) said: “While gold cash may rarely find its way into Bitcoin ETFs, their presence and the enthusiasm surrounding the new fund – by many measures the most successful launch in history – has increased interest in the metal. competition," he wrote in a research note on Monday.  

CoinShares data showed that interest in a U.S. spot Bitcoin ETF drove the cryptocurrency investment product to a fourth consecutive week of net inflows. While Grayscale Investments' Bitcoin Trust ETF ( GBTC ) posted another week of outflows of around $430 million, the category still recorded net inflows of $598 million last week.

Are the flows of gold and Bitcoin directly related?

Bryan Armor, director of passive strategy research at Morningstar, said he was not yet willing to "draw a direct line" between flows to Bitcoin ETFs and gold ETFs. The two assets represent distinct investments, he added.
Armor told Blockworks: “Gold may see outflows because interest rate cut expectations have changed, or because the market is shifting further into a risk-on mode.”  “These reasons are consistent with the way investors have traditionally used gold in their portfolios .

"If market risks increase, I expect the fund flow trend to reverse," he added. "A bear market may cause investors to move to high-quality assets and invest in Investors are risk averse, which will harm the flow of Bitcoin. ”

Fineqia International research analyst Matteo Greco said that he expects the opposite flow trend between Bitcoin funds and gold to eventually stop in the long term.

He pointed out that although some investors regard Bitcoin as digital gold and therefore choose to transfer funds from gold ETFs to Bitcoin ETFs, gold is still the preferred choice for many investors. Safe-haven assets. 

Greco said: "I expect this trend to gradually slow down over time and gold will maintain its respectability status, and in the long run, Bitcoin will attract more and more investment and recognition.  “I think it’s more of a net inflow into Bitcoin ETFs than a full replacement from gold to BTC. ”

Will the asset size of Bitcoin ETF exceed that of gold funds?

Although GBTC has Outflows since the switch to ETFs have exceeded $7.4 billion, but it remains the largest in the category, with nearly $22.8 billion in assets under management. 

Belé BlackRock's iShares Bitcoin Trust (IBIT) and Fidelity's Wise Origin Bitcoin Fund (FBTC) have approximately US$6.6 billion and US$4.7 billion in assets respectively.  

< p style="text-align: left;">Bitcoin ETFs manage nearly $38 billion in assets to date. At the same time, gold ETFs hold more than $90 billion in assets, of which GLD and IAU each account for approximately $54 billion U.S. dollars and $25 billion.

Greco noted that it took years for gold ETFs to attract similar levels of traffic to spot Bitcoin ETFs. In the long-awaited The funds are off to a historic start after the Bitcoin ETFs received regulatory approval, with both IBIT and FBTC growing to over $3 billion in assets a month after launch. GLD only topped $1 billion in its first 30 days of trading asset mark. 

Bitcoin ETF assets could eventually surpass gold as digitization and tokenization are expected to become more common, Greco said assets in the fund.

"Without ETFs, traditional financial investors would not be able to directly invest in BTC," he told Blockworks. "So the impact of this product could Even more transformative than in 2004 when the first gold ETF was approved. ”

Balchunas said in the >

But Amor said it is likely in the "distant future" that Bitcoin ETFs will overturn gold ETFs - if that happens. 

He noted: “I expect Bitcoin ETF flows to continue to be positive and Bitcoin to rise.  “But accessing the $90 billion in assets of gold ETFs will require broader adoption and continued strong performance from Bitcoin ETFs. ”