Key Points
- Bitcoin ETFs have experienced significant growth, nearing the size of gold ETFs.
- Analysts predict Bitcoin ETFs will surpass gold ETFs unless a major unexpected event occurs.
Bitcoin exchange-traded funds (ETFs) have seen an impressive surge in assets and flows since their launch, exceeding most predictions. They kicked off with assets worth $28.9 billion, converted from Grayscale’s flagship Bitcoin Trust. Now, the 11 Bitcoin ETFs collectively hold assets under management (AUM) of $61 billion.
Bitcoin ETFs vs Gold ETFs
With increasing inflows and a rising Bitcoin price, these ETFs are inching closer to the size of gold ETFs, which have a combined AUM of approximately $97 billion. Bloomberg Senior ETF Analyst, Eric Balchunas, believes that Bitcoin ETFs will surpass gold ETFs unless a significant unexpected event disrupts this trend.
Referring to the current situation of Bitcoin ETFs as ‘The Big Mo’, Balchunas talks about the momentum that is propelling these ETFs forward. The ongoing trend is creating a positive feedback loop; as the Bitcoin price increases, more people are drawn in, leading to increased inflows and further price increases.
Future Predictions
While Balchunas acknowledges that this trend will eventually plateau, he notes that the numbers are still growing daily. When VanEck’s Bitcoin ETF temporarily eliminated its fee, it saw inflows of $180 million, indicating sustained interest in these ETFs.
Balchunas suggests that a significant market downturn could potentially disrupt this trend. Although this wouldn’t necessarily lead to a Bitcoin decline, it could shift people’s focus towards their stock portfolios. However, as long as the markets continue to stay flat or rise, he sees no hindrance to the growth pattern of Bitcoin ETFs.
