Bitcoin ETF could overtake gold ETF in size within a month

By Crypto Gloom On Nov 24, 2024

Key Takeaways

US Bitcoin ETFs are expected to surpass gold ETFs in size by Christmas, with assets now reaching $107 billion.
BlackRock’s iShares Bitcoin Trust remains a key player this week, accounting for 73% of net inflows to Bitcoin ETFs.

The US Bitcoin ETF will soon overtake the gold ETF in size if it maintains its current accumulation rate. Bloomberg ETF analyst Eric Balchunas suggests these funds could outperform gold ETFs by Christmas.

As of November 23, Bitcoin ETF assets in the U.S. reached $107 billion, accounting for about 86% of the total net assets of gold ETFs, according to combined data from Balchunas and HODL15Capital.

“They’re only $23 billion behind gold ETFs and there’s a good chance they could outperform by Christmas,” Balchunas said.

Bitcoin ETF is closing the gap on Satoshi Nakamoto. The fund currently holds about 98% of Satoshi’s estimated Bitcoin holdings, and is likely to surpass the Bitcoin creator next week to become the world’s largest Bitcoin holder.

This week alone, U.S. spot Bitcoin ETFs saw net inflows of about $3.3 billion, with BlackRock’s iShares Bitcoin Trust (IBIT) accounting for about 62% of total net inflows, according to data from Farside Investors.

IBIT continues to widen the gap with BlackRock’s iShares Gold Trust (IAU) in terms of net assets. As of November 22, IBIT holds $48.4 worth of Bitcoin, valuing the IAU’s assets at approximately $34 billion.

Bitcoin’s surge raises concerns over its stability compared to gold

On Friday, the world’s largest cryptocurrency asset hit a new all-time high of $99,500, approaching six figures. For Bitcoin supporters, the bull market is still in its early stages.

VanEck’s target for Bitcoin this cycle is $180,000. In its latest report, the asset manager reiterated its outlook based on bullish indicators such as funding ratio, relative unrealized profits (RUP), and retail interest.

But State Street, which manages more than $4 trillion in assets, believes investors are being overly optimistic about Bitcoin’s potential and are overlooking the stability and long-term value that gold offers.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, warns that the current Bitcoin rally could create a misleading sense of security among investors. Unlike gold, which has long been a reliable store of value, Bitcoin’s future is uncertain, analysts said.

“Pure and simple Bitcoin is a comeback play and I think people are jumping into the comeback play,” Milling-Stanley told CNBC.

Milling-Stanley highlights that Bitcoin promoters who frequently compare Bitcoin mining to gold mining are creating a false analogy that mimics the appeal of gold.

“It has nothing to do with mining. This is computer work, pure and simple. But they wanted to look like gold, so they called it mining. “Maybe we can take some of the aura out of gold,” he added.

While gold recorded a 30% return since the beginning of the year, Bitcoin dominated the market, surging as much as 160%. Its market capitalization has now surpassed that of silver and Saudi Aramco.