Bitcoin ETFs Disrupt Gold’s Dominance

Bitcoin ETFs have quickly gathered $27.5 billion, surpassing silver ETFs and aiming for the $90 billion invested in gold ETFs.

According to a new J.P. Morgan chart, Bitcoin is already eating into gold’s launch after the much-anticipated launch of spot Bitcoin exchange-traded funds (ETFs).

The Emergence of Bitcoin ETFs

The introduction of spot Bitcoin ETFs was a watershed moment for cryptocurrencies, similar to the debut of gold ETFs in the early 2000s, transforming how people and institutions could acquire precious metals.

Now that spot Bitcoin ETFs have joined the market, they are not only introducing a new type of investment but also directly threatening gold’s long-held position as a store of value. The graph given by J.P. Morgan highlights this movement.

This tendency is supported by industry professionals like Adam Back, who believe Bitcoin will outperform gold and become the largest ETF commodity.

In a short period, Bitcoin ETFs have gathered $27.5 billion, surpassing silver ETFs and aiming for the $90 billion invested in gold ETFs.

In this context, precious metals trade volumes have been flat to decreasing, implying a probable association with the debut of Bitcoin ETFs.

According to Nicky Shiels of MKS PAMP, inflows into US Bitcoin ETFs have topped $25 billion in just 15 days, similar to the market value of the largest gold producer, Barrick.

Bitcoin ETF assets under management (AUM) are currently the second largest commodities ETF in the United States, trailing only gold, fueling the narrative of Bitcoin as the new “digital gold.”

However, while the ETFs have made significant progress, they still have a long way to go before they can match the $250 billion known investor holdings in all precious metals.

Looking ahead, Bloomberg Intelligence’s Mike McGlone offers a nuanced perspective, arguing that gold’s role may change during a prospective economic slump.

In an increasingly computerized society, he believes gold will appear “naked” if not linked with Bitcoin.