- Bitcoin ETFs near gold ETF assets at $107B, closing a $23B gap as investors shift toward digital assets over bullion.
- BlackRock’s IBIT leads Bitcoin ETF growth, attracting 62% of $3.3B inflows, signaling strong institutional demand.
- Bitcoin ETFs control 98% of mined BTC, poised to overtake gold ETFs by Christmas amid surging cryptocurrency interest.
Bitcoin ETFs in the U.S. are quickly coming closer in performance to gold-based ETFs, which paves the way for a potential event that has not yet been seen in the crypto space. By November 23, Bitcoin ETFs had $107 billion in assets, this makes 86% of total gold ETF assets.
According to Eric Balchunas, the Bitcoin ETFs may outstrip the gold ETFs by this Christmas proving that the investors are gradually shifting their preferences.
The $23 billion difference between BTC and gold ETFs has been closing at a fast pace due to increasing demand in BTC related investment products. Bitcoin ETFs have also become the largest single holder of the cryptocurrency, controlling 98% of the estimated one million BTC that are thought to have been mined by Bitcoin’s anonymous creator Satoshi Nakamoto.
Bitcoin ETFs Surge
In the past week, US spot BTC ETFs attracted a massive $3.3 billion in new investments, with BlackRock’s iShares Bitcoin Trust (IBIT) driving 62% of the increase. It demonstrates that institutional interest in digital assets continues to grow, and establishes BlackRock as the leader in the space.
With assets of $48.4 billion, IBIT has done better than BlackRock’s iShares Gold Trust (IAU) with $34 billion. This divergence is symptomatic of a wider trend of investors’ interest shifting towards cryptocurrency as an instrument that can be used instead of the traditional bullion.
The recent price surge of cryptocurrency to $99,500 has only increased its demand and use even more. In a recent note, VanEck, a large asset manager, noted that it has a $180,000 price target for BTC, based on positive market signals, including cheaper funding rates, increased retail interest, and untapped profit.
BTC Vs. Gold
While Bitcoin has given investors a 160% return on investment in the year to date, the cryptocurrency’s volatility is causing a split among analysts. George Milling-Stanley, chief gold strategist at State Street Global Advisors, said that the cryptocurrency has no history to rely on like gold.
He claims that the cryptocurrency is being used for its perceived potential for profit and not for its worth. He also points out that the digital asset is relatively new, with only a decade of history while the yellow metal has been around for thousands of years.
The rivalry between digital and physical commodities continues to heat up as the market value of BTC surpasses that of silver, and the cryptocurrency approaches the valuation of oil giant Saudi Aramco. The next several weeks will show whether it is possible for Bitcoin ETFs to outperform gold ETFs and revolutionize investment strategies across the globe.
