Spot Bitcoin ETFs Attract Massive Inflows, Gold ETFs See Outflows
The introduction of Spot Bitcoin ETFs has caused a significant shift in investor behavior, with billions flowing into Bitcoin ETFs and a substantial amount of money exiting gold ETFs. The top two gold ETFs, SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), have experienced net outflows since the launch of Bitcoin ETFs.
- GLD started 2024 with $58 billion in assets under management (AUM), while IAU had $26 billion.
- The outflows from gold ETFs intensified following the introduction of 10 Spot Bitcoin ETFs.
On the other hand, Spot Bitcoin ETFs have attracted massive inflows, with the two largest accumulating nearly $10 billion in AUM just over a month after their launch. In contrast, gold ETFs recorded net outflows.
- In the last week, Spot Bitcoin ETFs registered $777.79 million inflows, while gold ETFs saw $608.24 million net outflows.
Not a Direct Migration of Funds from Gold to Bitcoin
It is important to note that the outflows from gold ETFs do not necessarily imply a direct migration of funds to Bitcoin. Investors withdrew approximately $2.6 billion from GLD and about $507 million from IAU between January 11 and February 14. This is in contrast to the previous year when both funds experienced solid inflows.
- Out of the 14 gold ETFs analyzed on ETF.com, 11 have observed net outflows since the beginning of the year.
- Gold ETFs have registered massive outflows of $3.6 billion since the beginning of the year.
Spot Bitcoin ETFs Accumulate Billions in Assets Under Management
The two leading Spot Bitcoin ETFs, BlackRock’s IBIT and Fidelity’s FBTC, have collectively amassed nearly $10 billion in assets under management since their debut in January. When factoring in outflows from Grayscale’s GBTC, the Spot ETFs as a whole have seen over $5 billion in net inflows.
Will Bitcoin Surpass Gold’s Market Cap?
Crypto analysts are optimistic about Bitcoin’s future performance, expecting it to eclipse gold’s market cap. Jurrien Timmer, the Director of Global Macro at Fidelity and issuer of Spot Bitcoin ETFs, projects a massive expansion in Bitcoin’s market cap. He envisions it reaching $6 trillion, which is a quarter of the value of the “monetary gold” market.
- Timmer compares the segment of gold used for monetary purposes to the potential market capitalization of Bitcoin.
- He notes that monetary gold, excluding its use in jewelry or industries, is currently valued at approximately $6 trillion.
PlanB, a renowned Bitcoin analyst known for his stock-to-flow model, also predicts a substantial surge in Bitcoin’s value. He draws parallels with gold and anticipates that one Bitcoin will be equivalent to 100 gold ounces by 2024-2025, translating to a price of $200,000. By 2025, he envisions Bitcoin climbing to 300 gold ounces or $600,000.
Hot Take: The Rise of Bitcoin as a Gold Alternative
With the introduction of Spot Bitcoin ETFs and the significant outflows from gold ETFs, it is evident that investors are increasingly considering Bitcoin as an alternative to gold. Here’s why:
- Bitcoin ETFs have attracted massive inflows, while gold ETFs have experienced net outflows.
- Crypto analysts like Jurrien Timmer and PlanB are optimistic about Bitcoin’s future performance, projecting a higher market cap and value compared to gold.
If these trends continue, it is possible that Bitcoin could eventually surpass gold’s market cap and become a preferred investment choice for those seeking an alternative store of value. However, it is important to note that the cryptocurrency market is highly volatile and unpredictable, so thorough research and caution are advised before making any investment decisions.
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