Spot Bitcoin ETF Entries Challenge Gold ETFs!

• Since their launch on January 11, Spot Bitcoin ETFs have attracted billions of dollars, while a significant amount of money has also left gold ETFs.
• Bitcoin ETFs have garnered significant inflows, with the top two alone increasing their assets by almost $10 billion in just a little over a month.
• Considering the outflows from GBTC, Spot ETFs have seen a net inflow of over $5 billion in total.

While two major gold ETFs experience outflows, spot Bitcoin ETFs see more inflows: Can BTC surpass Gold?

Highlights of Money Inflows in Bitcoin ETFs

Since the introduction of new Spot Bitcoin ETFs, there has been a significant change in investor behavior, promoted as a modern alternative investment to gold. Since their launch on January 11, Spot Bitcoin ETFs have attracted billions of dollars, while a significant amount of money has also left gold ETFs.

The two largest gold ETFs in terms of assets, SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), have experienced net outflows. GLD, starting the year with $58 billion in assets in 2024, and IAU, with $26 billion, both followed this trend. Outflows from gold ETFs intensified after the introduction of 10 Spot Bitcoin ETFs.

Bitcoin ETFs have attracted significant inflows, with the top two alone increasing their assets by almost $10 billion in just a little over a month. Last week, from February 18 to February 23, despite significant outflows, Spot Bitcoin ETFs recorded inflows of $777.79 million. During this period, gold ETFs recorded net outflows of $608.24 million, adding to the substantial outflows seen at the beginning of the year.

However, this does not necessarily mean a direct fund shift from gold to Bitcoin. Investors withdrew approximately $2.6 billion from GLD and about $507 million from IAU between January 11 and February 14. This reflects a situation where both funds experienced strong inflows the previous year.

Out of the 14 gold ETFs analyzed by ETF.com, 11 have observed net outflows since the beginning of the year. Additionally, according to ETF.com, gold ETFs have experienced significant outflows totaling $3.6 billion since the beginning of the year.

Since the introduction of new Spot Bitcoin ETFs in January, following the launch of GBTC, which was already a closed fund, BlackRock’s IBIT and Fidelity’s FBTC, two leading Spot Bitcoin ETFs, have collectively accumulated almost $10 billion in assets. Considering the outflows from GBTC, Spot ETFs have seen a net inflow of over $5 billion in total.

Will Bitcoin Surpass the Market Value of Gold?

Crypto analysts are optimistic that Bitcoin will surpass the future market value of gold, reflecting a shift in sentiment towards silver. Jurrien Timmer, the Global Macro Director at Spot Bitcoin ETF issuer Fidelity, foresees an enormous expansion in Bitcoin’s market value. Timmer predicts an extraordinary market value of $6 trillion, which is a quarter of the market value of the “monetary gold” market.

In Timmer’s analysis, he compares the potential market value of Bitcoin with the segment of gold used for monetary purposes, which makes up 40% of the total above-ground gold reserves. Timmer notes that currently unused gold, excluding jewelry or industrial use, is worth about $6 trillion. Therefore, as the price of Bitcoin rises and crypto reaches a market value of $6 trillion, this will be a significant milestone compared to monetary gold.

Meanwhile, renowned Bitcoin analyst PlanB, known for the stock-to-flow model for BTC, made a bold prediction about the future price trajectory of BTC. According to PlanB’s latest analysis, he expects a significant increase in the value of Bitcoin in the coming years, drawing parallels with gold. He currently values one Bitcoin as equivalent to 26 ounces of gold and values one ounce of gold at $2,000.

Looking ahead to 2024-2025, PlanB anticipates a massive increase in Bitcoin’s price and expects the value of one Bitcoin to reach 100 ounces of gold, equivalent to $200,000, in 2024. Additionally, PlanB predicts that Bitcoin will rise to 300 ounces of gold by 2025, which would be equivalent to $600,000. This would elevate Bitcoin’s market value to $12 trillion, which is very close to the $13 trillion market value of gold.