Bitcoin ETF AUM Will Surpass Gold ETF AUM By Year-End, Says Analyst

Spot Bitcoin ETFs have witnessed heavy inflows over the past two weeks with BlackRock’s IBIT taking the lead. Last week, the total assets under management for the Bitcoin exchange-traded fund (ETF) crossed $100 billion with market analysts expecting it to overtake Gold ETF by the year-end. Of course, this would happen if the inflows keep the momentum along with the Bitcoin price surging to fresh all-time highs.

Can Bitcoin ETFs OverTake Gold ETFs By Year-End?

Crypto industry expert and ETF Store President, Nate Geraci, suggested a possibility that the spot Bitcoin ETFs could overtake Gold ETFs by the end of this year. As said, the Bitcoin exchange-traded fund market has already grown to $100 billion in size in less than a year of launch.

On the other hand, the Gold ETF market size surged to $271 billion by the quarter ending September, per the World Gold Council. Also, data shows that while Bitcoin ETF inflows surged in November and December, the Gold ETFs saw outflows first time in six months. Thus, the gap between the two has been shrinking fast.

Geraci noted that the outcome of his prediction would likely hinge on the comparative performance of Bitcoin and gold prices in the coming weeks. He also pointed out that physical gold ETFs were launched two decades ago, making such a development in BTC ETFs “astounding.”

BackRock’s iShares BTC ETF (IBIT) has already attracted over $4 billion in inflows since Thanksgiving, an achievement that would rank it as the second-best ETF launch of 2024. On Friday, BlackRock’s IBIT saw another $393 million in inflows thereby taking its total inflows closer to $36 billion.

BTC Can See A Short Squeeze

A tightening Bitcoin supply could set the stage for a potential price squeeze, according to a recent analysis by 10x Research. The report highlights notable Bitcoin outflows from exchanges, driven by growing demand from Bitcoin ETFs and corporate accumulators like MicroStrategy. All eyes will be on the FOMC meeting next week to decide the BTC price trajectory to new all-time highs.

Over the past 30 days, a net of 124,000 Bitcoins have exited exchanges, signaling reduced liquidity. Top crypto exchanges like Coinbase, Binance, Gemini, OKX, saw BTC withdrawals to the tune of 7-10% from its reserves.

If these trends persist, combined with robust demand, the market may face a severe Bitcoin supply squeeze. This scenario could be intensified by the introduction of options on Bitcoin ETFs, potentially triggering gamma squeezes that amplify price pressures further

As of press time, the Bitcoin price is trading 2% up at $101,953 with its market cap crossing $2 trillion. Per the Coinglass data, the 24-hour liquidations stand at $38.6 million with short liquidations soaring to $26.6 million.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast with a keen understanding of financial markets. His interest in economics and finance has led him to focus on emerging Blockchain technology and cryptocurrency markets. He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.