Could Bitcoin ETFs become larger investment vehicles than gold ETFs? Bloomberg analysts say it might happen in as quickly as under 24 months.
In a post to X on Monday, Bloomberg ETF analyst Eric Balchunas outlined how Gold ETFs have been gutted in recent weeks precisely as Bitcoin ETFs have absorbed over $5 billion of inflows following their launch last month.
In a note co-authored with Andre Yapp of Bloomberg Intelligence, the analysts wrote:
“The Bitcoin ETFs, though barely six weeks old, have taken in over $8 billion more than gold peers, already have 40% as much in assets and could pass them in size in less than two years.”
According to BitMEX Research, Bitcoin ETFs held over $37.3 billion in assets as of Friday. By comparison, data from VettaFi shows that gold ETFs hold roughly $88 billion, most of which is held by the SPDR Gold Shares (GLD) fund.
Gold funds have suffered $3.6 billion of net outflows since January 11. Balchunas believes that very little of those funds likely flowed directly into the new Bitcoin spot ETFs, but that the mere existence of the investment products is likely creating competition for precious metals at large.
“Gold ETFs could struggle to keep their $90 billion in assets partly due to performance,” the analysts continued. The metal’s price per ounce has stayed roughly flat around $2000 for a month, while BTC has surged 28% over the same time frame.
On Monday, the latter tapped another two-year high above $53,500 per coin, triggering over $200 million in liquidations.
Though ETF inflows have begun slowing recently, many analysts suspect that the new funds could drive BTC to over $150,000 in the next 12 to 24 months. This would naturally increase the AUM of existing BTC sitting in ETFs controlled by BlackRock and Fidelity, possibly making Bitcoin the largest ETF commodity.
Regarding Bitcoin’s success against gold, Balchunas added:
“BlackRock probably not as amused by this as everyone else since they have $IAU and make 25bps on $25b in aum = big revenue generator for them. Although net they [are] still winning big here and will over time.”
Bitcoin is often likened to gold as a hedge against monetary debasement due to the difficulty of increasing the supply of either asset.