Galaxy Digital Research Shows Bitcoin ETFs Outperforming Gold ETFs

TLDR

• Bitcoin’s market cap has reached 14% of gold’s $17.8 trillion value, hitting a new all-time high relation to gold
• Bitcoin price reached $108,000 on Dec. 17, with its market cap now at $2.13 trillion
• Federal Reserve Chair Powell acknowledged Bitcoin as a “digital version” of gold while maintaining it’s a speculative asset
• Bitcoin ETFs have surpassed gold ETFs in total assets under management ($129.25B vs $128.88B)
• Galaxy CEO Novogratz predicts Bitcoin will surpass gold’s market cap in 5-8 years

Bitcoin continues to break records in December 2024, reaching new heights in both its price and its relationship to gold. The cryptocurrency’s market capitalization has grown to 14% of gold’s $17.8 trillion value, marking a historic milestone in the asset’s evolution.

On December 17, Bitcoin’s price surged to $108,000, pushing its total market capitalization to $2.13 trillion. This value now represents more than two-thirds of the gold held by central banks worldwide, which stands at $3.13 trillion.

The growing acceptance of Bitcoin in traditional finance circles has been highlighted by recent developments in the ETF market. Bitcoin ETFs have accumulated $129.25 billion in assets under management, exceeding gold ETFs which hold $128.88 billion. BlackRock’s iShares Bitcoin ETF (IBIT) has shown particularly strong performance compared to its gold counterpart, the iShares Gold ETF (IAU).

Alex Thorn, head of research at Galaxy, presented data showing Bitcoin’s increasing share of gold’s market capitalization. His analysis included a chart demonstrating the accelerating growth pattern of Bitcoin relative to the precious metal.

Mike Novogratz, founder and CEO of Galaxy Digital, has made a bold prediction based on these trends. He believes Bitcoin’s total market value could match and eventually exceed that of gold within the next five to eight years.

The cryptocurrency’s rise comes as the U.S. Federal Reserve considers potential rate cuts. This monetary policy backdrop has created favorable conditions for Bitcoin’s growth, as investors seek alternative stores of value.

Federal Reserve Chair Jerome Powell has contributed to the ongoing discussion about Bitcoin’s role in the financial system. In recent statements, Powell acknowledged Bitcoin as a “digital version” of gold, marking a shift in how top financial officials view the cryptocurrency.

However, Powell maintained a measured stance, describing Bitcoin as a speculative asset. He emphasized that while Bitcoin may share some characteristics with gold, it does not serve the same functions as traditional sovereign currencies like the U.S. dollar.

The Fed Chair pointed out that Bitcoin’s primary appeal remains narrow in scope. He noted that the cryptocurrency has not become widely used for everyday payments or as a medium of exchange, distinguishing it from conventional currencies.

The institutional investment landscape for Bitcoin continues to evolve. Traditional financial firms are increasingly offering Bitcoin-related products and services to meet growing client demand.

Data shows that Bitcoin’s market presence has grown steadily throughout 2024. The cryptocurrency’s value now exceeds important benchmarks that were previously considered unreachable by many market observers.

The relationship between Bitcoin and gold has become a key metric for measuring the cryptocurrency’s growth. As Bitcoin’s market share relative to gold increases, it represents a shift in how investors view digital assets.

Trading volumes for Bitcoin have remained robust, indicating sustained interest from both retail and institutional investors. Market data shows consistent participation across various trading venues and investment products.

Price discovery for Bitcoin has become more efficient as market infrastructure continues to develop. The increased presence of regulated venues and professional traders has contributed to more stable and liquid markets.

Recent market activity suggests that Bitcoin’s growth trajectory may continue as more investors gain exposure to the asset class. Trading patterns indicate steady accumulation by both long-term holders and new market participants.