Bitcoin ETF volume has been increasing the past couple of days with its value reaching almost $7.7 Billion in one day thanks to the huge influx of funds at more than $600 Million yesterday.
The current conditions of money flowing to the ETF has raised questions considering its position compared to the more popular Gold ETF.
Can Bitcoin ETF Surpass Gold ETF?
The current Bitcoin Spot ETF has received a huge amount of funds flowing into it, where most of these funds came from institutional investors.
Institutional investors are prohibited by regulations to buy certain assets, some including Bitcoin, which is why they tend to look for other asset alternatives that could get them that asset in their portfolio, hence making them purchase the ETF.
Looking at data from Dune Analytics, created by a user called @hildobby, the current asset under management or AUM of all the existing Bitcoin Spot ETF stands at $47.03 Billion.
On the other hand, Gold ETF AUM currently stands at around $92.12 Billion, which is around half the current AUM for Bitcoin Spot ETF.
This is significant data to answer the question of whether Bitcoin Spot ETF will beat Gold ETF in terms of its size.
The AUM value of Bitcoin Spot ETF only took about 7 weeks of time since its launch, which is a significant difference compared to the time it took for the Gold ETF to reach its current AUM.
It probably took years for the Gold ETF to reach the current AUM of the Bitcoin Spot ETF, so by that logic, it is very possible for Bitcoin to have a higher AUM compared to Gold ETF overall.
But the question is, when is it going to beat the AUM of Gold ETF? The answer to that question is still unclear as the current surge of volume in Bitcoin Spot ETF is also supported by the market cycle.
So there is no certain answer of when the Bitcoin Spot ETF will beat the Gold ETF, but one thing for sure is in the future it will happen.
Can Bitcoin Beat Gold?
The possibility of that happening is supported by narratives, data, and calculations around whether the overall market capitalization of Bitcoin will beat the market capitalization of Gold itself.
Looking into this, an analyst from Fidelity called Jurrien Timmer has calculated the future market share of those two assets with a stock to flow model.
Stock to flow models are financial models used to calculate the future value of an asset based on the scarcity value that it has going into the future.
From his calculations, Bitcoin has a long way to go but will eventually capture 40% of Gold’s value in the year 2050. Note that the current market capitalization of Gold stands around $6 Trillion while Bitcoin still stands at $1 Trillion.
Considering that Bitcoin’ scarcity is higher than Gold, and the potential price gains that come from its volatility is also higher, it is predicted that the interest towards Bitcoin will be higher than Gold, even though its market capitalization will not.
This could trigger a huge demand of Bitcoin and the Bitcoin Spot ETF, eventually beating the AUM of Gold ETF in the future.
The narrative is also echoed by Lary Fink, The CEO of BlackRock, the biggest hedge fund in the financial market with over $10 Trillion in AUM, higher than most countries’s GDP.
Seeing as Bitcoin has the support of BlackRock and other big financial institutions in the world, it is not impossible for Bitcoin Spot ETF to beat Gold ETF in the future.
Disclaimer:
The views expressed belong exclusively to the author and do not reflect the views of this platform. This platform and its affiliates disclaim any responsibility for the accuracy or suitability of the information provided. It is for informational purposes only and not intended as financial or investment advice.
Official Website
Website: https://www.bitrue.com/
Sign Up: https://www.bitrue.com/user/register