March 27, 2024
Bitcoin ETF Makes History: Surpasses $10 Billion in AUM in 2 Months, Dwarfing Gold's 2-Year Journey
Bitcoin ETF

Bitcoin ETF Makes History: Surpasses $10 Billion in AUM in 2 Months, Dwarfing Gold’s 2-Year Journey

In a remarkable feat, BlackRock’s iShares Bitcoin Trust (IBIT) has swiftly crossed the $10 billion mark in assets under management (AUM) in just over seven weeks since its launch—a milestone that took the first U.S. gold-backed ETF more than two years to achieve.

As of March 1, BlackRock’s Bitcoin ETF achieved the impressive $10 billion AUM mark, a mere 39 trading days post-launch. In stark contrast, the United States’ inaugural gold ETF, SPDR Gold Shares (GLD), required over two years to reach the same milestone following its launch in 2004, according to the Zero Hedge finance blog.

The disparity in the pace of asset accumulation between Bitcoin ETFs and traditional gold funds has been highlighted by industry experts. Will Clemente, co-founder of Reflexivity Research, emphasized the overwhelming dominance of Bitcoin ETF inflows over those of gold, stating on March 3, “Bitcoin ETF inflows have blown gold’s out of the water. Not even close, utterly dwarfed, decimated.”

The surge in interest in Bitcoin ETFs has been underscored by several days of record inflows to spot Bitcoin ETFs, with the period from February 26 to 28 witnessing inflows exceeding $500 billion for the new nine ETFs. Retired venture capitalist Jeff Kirdeikis, on March 4, shared a chart illustrating the comparison between BTC ETF inflows and gold fund outflows, revealing that Bitcoin products have already accumulated nearly half of the value of gold funds since their January launch.

However, not all industry figures are convinced of Bitcoin’s superiority over gold. Goldbug Peter Schiff, on March 2, criticized CNBC for its focus on Bitcoin ETFs, highlighting the $43 rise in gold prices and the record-high price of the gold ETF GLD, which went unreported amidst the Bitcoin frenzy.

While spot gold prices have returned to near-peak levels of $2,081 per ounce on March 3, the precious metal has only experienced a modest 1% gain since the beginning of the year. In stark contrast, Bitcoin prices have surged by an impressive 50% over the same period.

In late February, Bloomberg ETF analyst Eric Balchunas noted the inverse correlation between the struggles of gold and the success of Bitcoin ETFs, remarking, “Gold’s pain is Bitcoin ETFs’ gain in the store of value smackdown.” Balchunas further suggested that there was a “decent chance” that Bitcoin ETFs would surpass gold ETFs in AUM in less than two years.

As the debate between traditional store of value assets and emerging digital alternatives continues to unfold, the meteoric rise of Bitcoin ETFs serves as a testament to the evolving landscape of investment opportunities in the ever-changing world of finance.


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