Bitcoin ETFs to Surpass Total Gold ETF Flows in Just 2 Years

On Oct 18, 2024

The rapid growth of spot Bitcoin ETFs has caught the attention of traditional investors as well. Recent data reveals that Bitcoin ETFs have reached $20 billion in net inflows, setting a new pace of growth that has outstripped even gold ETFs. Moreover, industry analysts believe Bitcoin spot ETFs could overtake their gold counterparts in just a couple of years owing to increasing demand from both institutional and retail investors.

Bitcoin ETFs Take Lead Over Gold ETFs

Launched only in 2024, Bitcoin ETFs have grown at a staggering rate, a feat that took gold ETFs much longer to achieve. Comparatively, gold ETFs, which debuted in 2004, took five years to reach the same $20 billion milestone. This contrast illustrates how the cryptocurrency market is maturing and gaining credibility among traditional investors.

Financial analysts are optimistic that BTC ETFs will continue to grow rapidly, with the potential to surpass gold ETFs. According to Nate Geraci, President of the ETF Store, the current momentum of Bitcoin spot ETFs suggests that it won’t take long before they outpace gold ETFs in cumulative inflows.

Geraci predicted the BTC ETFs to overtake total gold inflows in just two years. Currently, gold ETF inflows stand at around $50 billion while they surpassed the $75 billion mark during the peak. He attributed the rapid growth of Bitcoin ETFs to the heightened interest from major financial institutions, which have been increasingly entering the crypto market.

Here’s a chart for you…
Cumulative net flows into physical gold ETFs vs spot bitcoin ETFs.
Gold ETFs launched in 2004.
Bitcoin ETFs in 2024.
20yr head start for gold ETFs, but wouldn’t be surprised to see bitcoin ETFs surpass them in next 2yrs.
via @Todd_Sohn pic.twitter.com/1e6gOMb3VZ
— Nate Geraci (@NateGeraci) October 18, 2024

In addition, Eric Balchunas, a senior ETF analyst at Bloomberg, also commented on the swift growth of BTC ETFs. He pointed out that several major ETFs, including those managed by firms like BlackRock, Fidelity, and Grayscale, have seen significant inflows in recent weeks.

For instance, BlackRock’s IBIT Bitcoin ETF alone attracted nearly $400 million in inflows in mid-October. This feat is seen as a signal of growing confidence in Bitcoin’s long-term potential as an investment vehicle.

Growing Institutional Interest

Institutional interest has been particularly instrumental in driving these inflows. Over the past week, 11 prominent Bitcoin ETFs, including those from ARK 21Shares, Valkyrie, and VanEck, collectively recorded over $1.6 billion in new capital. This strong demand highlights how mainstream acceptance of Bitcoin as an asset class is deepening, with institutions taking a more serious approach to crypto investments.

Another noteworthy development is the launch of hybrid investment vehicles, such as the Bitcoin and Gold ETF recently introduced by Quantity Funds. This product offers exposure to both Bitcoin and gold, reflecting the increasing desire among investors to diversify their portfolios while maintaining exposure to both traditional and digital assets.

Furthermore, as the investment climate continues to evolve, analysts at Standard Chartered predict that Bitcoin could soon reclaim its all-time high of $73,800. This prediction is important especially with upcoming political and economic events such as the U.S. presidential election.

The re-election of Donald Trump, known for his favorable stance toward cryptocurrencies, could potentially create a more welcoming environment for Bitcoin. As of press time, BTC price stood at $68,842.17, gaining 2.15% on Friday, October 18.