Bitcoin ETFs could overtake gold ETFs in size within one month

Key Takeaways

US Bitcoin ETFs are expected to surpass gold ETFs in size by Christmas, with current assets at $107 billion.
BlackRock’s iShares Bitcoin Trust remains a key player this week, capturing 73% of net inflows into Bitcoin ETFs.

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US Bitcoin ETFs will soon catch up to gold ETFs in size if they maintain their current accumulation rate. Bloomberg ETF analyst Eric Balchunas suggests these funds could eclipse gold ETFs by Christmas.

As of November 23, Bitcoin ETFs in the US reached $107 billion in assets, which represents around 86% of the total net assets of gold ETFs, according to data combined by Balchunas and HODL15Capital.

“They only lag gold ETFs by $23b, good shot to surpass by Xmas,” Balchunas stated.

Bitcoin ETFs are closing the gap with Satoshi Nakamoto. These funds currently hold approximately 98% of Satoshi’s estimated Bitcoin stash, with a high chance of overtaking the Bitcoin creator to become the world’s biggest Bitcoin holder next week.

This week alone, US spot Bitcoin ETFs netted around $3.3 billion in net inflows, with BlackRock’s iShares Bitcoin Trust (IBIT) capturing around 62% of the total, Farside Investors’ data shows.

IBIT continues to widen gap with BlackRock’s iShares Gold Trust (IAU) in net assets. As of November 22, IBIT held $48,4 worth of Bitcoin while IAU’s assets were valued at around $34 billion.

Bitcoin’s surge raises concerns about stability compared to gold

On Friday, the world’s largest crypto asset set a new all-time high of $99,500, approaching the six-figure mark. For Bitcoin advocates, the bull market is still in its early stages.

VanEck’s target for Bitcoin this cycle is $180,000. The asset manager reiterated its projection in a recent report, supported by bullish indicators like funding rates, Relative Unrealized Profit (RUP), and retail interest.

However, State Street, managing over $4 trillion in assets, thinks investors are becoming overly optimistic about Bitcoin’s potential, and overlooking the stability and long-term value that gold offers.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, warns that the current Bitcoin rally may create a misleading sense of security among investors. Unlike gold, which has a long history of being a reliable store of value, Bitcoin’s future is uncertain, according to the analyst.

“Bitcoin, pure and simple, it’s a return play, and I think that people have been jumping onto the return plays,” Milling-Stanley told CNBC.

Milling-Stanley stresses that Bitcoin promoters, who often compare Bitcoin mining to gold mining, are creating a false sense of similarity that mimics gold’s allure.

“There’s no mining involved. This is a computer operation, pure and simple. But they called it mining because they wanted to seem like gold — maybe take some of the aura away from the gold,” he added.

While gold has enjoyed a 30% year-to-date return, Bitcoin has stolen the show with a staggering 160% surge. Its market cap now eclipses that of silver and Saudi Aramco.