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Bitcoin ETFs Overshadow Gold, BTC to Surpass Gold Market Cap?

Bitcoin ETFs Overshadow Gold, BTC to Surpass Gold Market Cap?

Over $750 million was invested in Bitcoin ETFs last week. 

Massive outflows from gold ETFs increased the outflow value for the year thus far.

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Crypto analysts are optimistic about the price surge of Bitcoin and its potential to surpass the market capitalization of gold. 

After the launch of the new Spot Bitcoin ETFs, which were partly positioned as a cutting-edge substitute for gold investments, investor behaviour has changed dramatically. Since their January 11 January 11 launch, billions of dollars have poured into Bitcoin ETFs, but a sizable sum has left gold ETFs. 

ETFs for Bitcoin Overshadow ETFs for gold 

There have been net outflows from the top two gold ETFs by assets under management, iShares Gold Trust (IAU) and SPDR Gold Shares (GLD). GLD and IAU, gold ETFs with $58 billion and $26 billion respectively, saw withdrawals spike after 10 Spot Bitcoin ETFs launched. This pattern suggests investors are shifting their focus from gold to Bitcoin.

Just over a month after their launch, the two largest Bitcoin ETFs have amassed nearly $10 billion in assets under management, demonstrating the enormous inflows the funds have received. Despite notable withdrawals later in the week, spot Bitcoin ETFs saw $777.79 million in inflows during the most recent week, from February 18, February 18 to February 23 February 23. However, gold ETFs saw net outflows of $608.24 million, which increased the enormous outflows for the year. 

This does not, however, necessarily mean that money will move straight from gold to Bitcoin. Between January 11, January 11, and February 14 February 14, investors took out roughly $2.6 billion from GLD and approximately $507 million from IAU. This is a far cry from the prior year when both funds saw healthy inflows. 

Eleven of the 14 gold ETFs ETF.com examined have seen net withdrawals since the year’s start. Furthermore, according to ETF.com, gold ETFs have seen enormous withdrawals totalling $3.6 billion since the year’s beginning. 

Except for Grayscale’s GBTC, which was already a closed-end fund, the two most popular new Spot Bitcoin ETFs, BlackRock’s IBIT and Fidelity’s FBTC, have accumulated almost $10 billion in assets under management since their launch in January. Including the withdrawals from GBTC, the net inflows into the Spot ETFs have been more than $5 billion overall. 

Will Bitcoin’s Market Cap Overtake Gold’s? 

Crypto experts are bullish about Bitcoin’s future performance because they believe it will surpass the market capitalization of gold like silver. Jurrien Timmer, Director of Global Macro at Fidelity and creator of the Spot Bitcoin ETF has forecasted a significant rise in the market capitalization of Bitcoin. Timmer says it will grow to an astounding $6 trillion, or 25% of the value of the “monetary gold” market. 

Timmer dives into Bitcoin’s potential, comparing its market cap to the monetary value of 40% of all above-ground gold reserves. He mentioned that the current market value of gold is about $6 trillion, not including the use of metal in industries or jewellery. Therefore, if Bitcoin continues to rise and reaches a $6 trillion market valuation, that would be a huge accomplishment compared to gold as money. 

In the meantime, prominent Bitcoin analyst PlanB, well-known for developing the stock-to-flow model for BTC, has made a daring prediction about the future course of BTC’s price. PlanB recently conducted an analysis and found that, similar to gold, he expects Bitcoin’s value to rise significantly over the next few years. At present, he mentions that one Bitcoin is worth 26 ounces of gold, with an ounce of gold valued at $2,000. 

In 2024–2025, PlanB projects a sharp rise in the price of Bitcoin to approximately 100 gold ounces, or $200,000. In addition, PlanB predicts that by 2024, Bitcoin will have increased to 35 gold ounces, or roughly $70,000 and that it will soar to 300 gold ounces, or $600,000. This points to a $12 trillion market cap for Bitcoin, which is considerably closer to the over $13 trillion market valuation for gold. 

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