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Analysts say heavy inflows into global Bitcoin exchange-traded products, including recently approved US-based exchange-traded funds, could threaten gold’s status as the world’s primary store of value in the long term. List said.
According to Andre Dragos, head of research at ETC Group, there is a growing disconnect between global capital flows into Bitcoin and equivalent flows into gold. “This may be an early sign that Bitcoin will steal the gold crown as the primary store of value,” Dragosh told The Block.
The analyst added that a large portion of the overall new investment in Bitcoin appears to be related to investments in US-based ETFs. “These new ETF flows are becoming increasingly important to Bitcoin’s overall performance,” he said.
Year-to-date net inflows into global Bitcoin exchange-traded funds and products have increased significantly since early February, according to data from ETC Group. The observed trend is partially due to a recent slowdown in outflows from Grayscale’s converted GBTC funds. The block’s data dashboard shows that GBTC outflows have slowed since the last week of January.
According to data from The Block, last Thursday, the ETF had inflows of $389.55 million and outflows of $168 million. BlackRock’s iShares Bitcoin ETF (IBIT) had the largest share of inflows last week, with the fund receiving $224.3 million last Thursday alone.
Net inflows into gold have increased since the start of the year compared to net inflows into Spot Bitcoin ETFs and global ETPs from Canada, Europe and Asia, according to data from ETC Group.
Bitcoin combines a “risk-on” investment with a store of value
Analysts at Ryze Labs echoed ETC Group’s observations, noting that since the beginning of the year, “the top 14 gold ETFs have experienced significant outflows of $2.4 billion, in contrast to the 10 leading Bitcoin “ETFs have experienced significant outflows of $2.4 billion.” It attracted a combined inflow of $3.89 billion. ”
“This trend strengthens our confidence in Bitcoin’s dual role as a ‘risk-on’ investment and a reliable safe-haven asset. “We continue to believe that gold will outperform gold in both market conditions.” Sent to The Block.
Dragosh expects this trend to continue in the long term, with the ultimate hope that “Bitcoin will eventually destroy gold as the primary store of value.”
However, the head of research at ETC Group emphasized that the current market capitalization of global gold ETPs is approximately three times the market capitalization of Bitcoin ETPs and ETFs combined. “In this regard, Bitcoin ETP and ETF market capitalization could leapfrog gold over the next two years through price appreciation,” he added.
The largest digital asset by market cap traded at $52,357 at 6:45 a.m. ET, according to The Block’s Price Page. The GM 30 index, which represents the top 30 cryptocurrencies, fell 1.72% to 114.39 in the past 24 hours.
Bitcoin price has increased by more than 1% in the past 24 hours. Image: The Block.
Disclaimer: The Block is an independent media outlet that delivers news, research and data. As of November 2023, Foresight Ventures is a majority investor in The Block. Foresight Ventures invests in other companies in the cryptocurrency space. Cryptocurrency exchange Bitget is an anchor LP of Foresight Ventures. The Block remains independently operated to provide objective, impactful, and timely information about the cryptocurrency industry. Current financial disclosure information is as follows:
© 2023 The Block. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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