Why Bitcoin ETFs could ‘conquer’ gold ETFs within months

Bitcoin spot ETFs have amassed $55 billion in assets so far.
They could surpass gold ETFs within a matter of months, analysts say.
Gold ETFs have almost $100 billion in assets — and are suffering outflows.

Bitcoin spot exchange-traded funds could soon surpass gold ETFs in terms of value.

Two months after they launched, US spot Bitcoin ETFs have traded over $110 billion in value and amassed $55 billion in assets, according to Bloomberg Intelligence ETF analyst Eric Balchunas.

That’s almost twice as much as what Grayscale Investments’ Bitcoin Trust originally brought to the table when it was converted into an ETF, the analyst said.

“This puts [Bitcoin ETFs] on pace to pass gold ETFs in size in a few months rather than years,” Balchunas and Bloomberg Intelligence associate analyst Sebastien Cabral wrote today.

“Conquering gold ETFs could be too easy a goal for the spot bitcoin ETFs,” Balchunas said. “The early flows and volume are just overwhelming, [which] sets a strong foundation for growth. Ok to think bigger now.”

Gold ETFs hold almost $100 billion in value, according to ETF institute co-founder Nate Geraci.

“Total flows into nine new spot Bitcoin ETFs over the past two months exceeds total flows into all physical gold ETFs over the past 5 years,” Geraci noted.

The drop in flows into gold ETF is certainly also playing a role. Cumulative flows for gold ETFs peaked in October 2020, macro analyst Jim Bianco said, and have dropped from roughly $67 billion to $36 billion in the span of three years.

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MicroStrategy co-founder Michael Saylor told CNBC today that Bitcoin was “gonna eat gold.”

“It’s got all of the great attributes of gold, and it’s got none of the defects,” he said.

Crypto inflows

Crypto saw record inflows of $2.7 billion last week, according to a CoinShares report.

The inflows brought total assets in crypto investment vehicles to a record high of $94.4 billion — 14% higher than last week and 88% higher than at the beginning of the year.

Over $2.6 billion of these flows went into Bitcoin.

Nevertheless, investment vehicles that are short Bitcoin are also gaining flows. ProShares’ short Bitcoin ETF had $11 million in inflows last week, bringing its total assets to $96 million.

Tom Carreras is a markets correspondent for DL News. Got a tip about markets? Reach out at tcarreras@dlnews.com