Can Bitcoin ETFs Surpass Gold ETFs? Potential Scenarios!

• Bitcoin and Gold are once again in the spotlight as both asset classes reached fresh all-time highs on Tuesday, March 5th.
• Bloomberg’s Senior ETF Strategist Eric Balchunas quickly highlights the impact of significant inflows into Bitcoin ETFs.
• While Gold has experienced a significant recovery in prices, investor interest seems to be lacking.

As massive inflows into spot Bitcoin ETFs attract the attention of institutional investors in the U.S., investors wonder if they can surpass Gold ETFs.

Comparison of Bitcoin and Gold ETFs

Bitcoin and Gold are once again in the spotlight as both asset classes reached fresh all-time highs on Tuesday, March 5th. On the other hand, massive inflows into spot Bitcoin ETFs continue, and the daily trading volume surpasses $10 billion.

Bloomberg’s Senior ETF Strategist Eric Balchunas quickly highlights the impact of significant inflows into Bitcoin ETFs. As a groundbreaking development in the cryptocurrency market, there are now over $50 billion in assets in ten Spot Bitcoin Exchange-Traded Funds (ETFs).

This achievement comes just seven weeks after the ETFs were initially introduced to the market with assets below $30 billion. While approximately $8 billion of the total assets are attributed to investor inflows, the rest is due to the appreciation of Bitcoin’s value.

Balchunas added that if these ETFs maintain their current momentum and add $10 billion in assets monthly—which is considered an extraordinary and possible scenario depending on Bitcoin’s price trend—they could potentially surpass the managed assets of gold ETFs by the summer.

However, comparing them to gold ETFs reveals a significant variable. Despite a substantial recovery in Gold prices, investor interest appears to be lacking. In particular, the largest gold ETF, $GLD, has experienced consecutive outflows every week since the beginning of the year, according to Balchunas’s reports.

Both Bitcoin and Gold to Benefit from Fed Policy

The new all-time highs for Bitcoin and gold are causing some turmoil in global market risk appetite. Bitcoin has surged nearly 50% this year, partly as a result of increased investments in new U.S. exchange-traded funds focused on the digital currency.

On the other hand, the increase in gold prices may indicate that investors are adopting a defensive stance amid concerns about geopolitical tensions or potential corrections after a long growth period in global stock markets. Chris Weston, Research Head at Pepperstone Group Ltd., stated:

“Gold has had a big move overnight, volumes are very large – I’ve had a lot of client calls asking what’s going on.” Fast-money investors “are buying the momentum, and we’re seeing it in Bitcoin too.”

Both Bitcoin and gold are seen as potential beneficiaries of expected looser monetary policies. Market swaps indicate a 62% probability of a Federal Reserve interest rate cut in June, an increase from the 58% probability at the end of February.