Bitcoin ETFs to Surpass Gold ETFs by Year-End? $100B AUM Milestone Reached
Spot Bitcoin ETFs have grown to over $100 billion in assets under management (AUM) in just one year.
The rapid growth has led to speculation that Bitcoin ETFs could surpass Gold ETFs by the end of the year with strong inflows and rising Bitcoin prices.
Gold ETFs reached $271B in AUM by Q3 2024 according to the World Gold Council. But Gold ETFs saw outflows in November and December for the first time in 6 months, closing the gap with Bitcoin ETFs. BlackRock’s iShares Bitcoin Trust (IBIT) has been the big driver, with over $4B in inflows since Thanksgiving, making it the 2nd best ETF launch of 2024.
Crypto expert Nate Geraci said Bitcoin ETF growth is a big deal, it’s done in one year what Gold ETFs did in 20 years. The trajectory will depend on how Bitcoin and gold perform in the coming weeks.
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Supply Squeeze Could Propel Bitcoin Prices
Bitcoin is also facing a supply squeeze as demand from ETFs and institutions continues to rise. 10x Research says a net 124,000 Bitcoins left major exchanges like Coinbase, Binance and OKX in the last month, that’s less liquidity. With ETF inflows so strong, that’s a lot of upward pressure.
And MicroStrategy and other institutions are buying more Bitcoin, less supply. Analysts say gamma squeeze is possible as options on Bitcoin ETFs increase demand and price..
BlackRock Leads the ETF Market Growth
BlackRock’s iShares Bitcoin Trust (IBIT) has cemented its position as a key player, with inflows nearing $36 billion by mid-December. On a single day last week, IBIT recorded inflows of $393 million, underscoring its strong appeal among institutional and retail investors.
Key factors fueling this trend include:
Institutional Confidence: BlackRock’s entry and success in the market have legitimized Bitcoin ETFs.
Declining Gold Interest: Outflows from Gold ETFs signal a potential shift in investor preference.
Price Momentum: Bitcoin’s 2% rise to $101,953, with a market cap surpassing $2 trillion, has further boosted interest.
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