Bitcoin ETFs beat Gold ETFs with 65% gain since launch
- Spot Bitcoin ETFs surpassed other US ETFs with 65% year-to-date returns since inception.
- Bitcoin ETFs have amassed $70 billion in assets, more than 50% of physical gold ETFs, holding over $130 billion.
- Bitcoin ETFs recorded $2.2 billion in inflows last week, stirred by anticipation toward the US presidential election.
Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.
Bitcoin performance growth flips Gold as investors maintain positive sentiment
The world's largest crypto asset by market cap has gained massive popularity among institutional investors. Since its approval in January, it has become a favorite alternative investment to traditional financial instruments like gold.
In an X post on Friday, Nate Geraci, co-founder of ETF Institute and the President of ETF Store, revealed that the total assets under management (AUM) among Bitcoin ETFs had risen to over $70 billion within 10 months. This has seen the total assets in Bitcoin ETFs rise more than 50% of physical gold ETFs ($130 billion), which have been running for about two decades.
To solidify the comparison, Bitwise Chief Investment Officer, Matt Hougan, stated that BlackRock's Bitcoin Trust (IBIT) has recorded net inflows of $25.8 billion since its approval in January. On the other hand, its Gold Trust (GLD) has witnessed only $20.9 billion in inflows since it launched in November 2004.
Additionally, the year-to-date inflow of Bitcoin ETFs is $24 billion, surpassing that of gold, which is nearly $2 billion. The high inflows saw BTC gaining about 65% since the beginning of the year, while gold returns stood at 32%, according to Nate Geraci.
Your daily spot btc ETF stat…
— Nate Geraci (@NateGeraci) November 2, 2024
Ytd net inflows into gold ETFs = $1.7bil
Ytd net inflows into spot btc ETFs = $24.3bil
Ytd gold return = 32%
Ytd bitcoin return = 65%
Meanwhile, Bitcoin ETFs were responsible for nearly all the flows witnessed across crypto ETFs last week, recording $2.2 billion in net inflows. According to CoinShares, the high inflows were a result of heightened anticipation for the presidential election, which is less than 24 hours away.
The renewed interest from crypto investors toward the election could be tilted toward a Trump win, as many believe the Republican candidate's victory will send Bitcoin to a new all-time high.
Crypto ETF FAQs
An Exchange-Traded Fund (ETF) is an investment vehicle or an index that tracks the price of an underlying asset. ETFs can not only track a single asset, but a group of assets and sectors. For example, a Bitcoin ETF tracks Bitcoin’s price. ETF is a tool used by investors to gain exposure to a certain asset.
Yes. The first Bitcoin futures ETF in the US was approved by the US Securities & Exchange Commission in October 2021. A total of seven Bitcoin futures ETFs have been approved, with more than 20 still waiting for the regulator’s permission. The SEC says that the cryptocurrency industry is new and subject to manipulation, which is why it has been delaying crypto-related futures ETFs for the last few years.
Yes. The SEC approved in January 2024 the listing and trading of several Bitcoin spot Exchange-Traded Funds, opening the door to institutional capital and mainstream investors to trade the main crypto currency. The decision was hailed by the industry as a game changer.
The main advantage of crypto ETFs is the possibility of gaining exposure to a cryptocurrency without ownership, reducing the risk and cost of holding the asset. Other pros are a lower learning curve and higher security for investors since ETFs take charge of securing the underlying asset holdings. As for the main drawbacks, the main one is that as an investor you can’t have direct ownership of the asset, or, as they say in crypto, “not your keys, not your coins.” Other disadvantages are higher costs associated with holding crypto since ETFs charge fees for active management. Finally, even though investing in ETFs reduces the risk of holding an asset, price swings in the underlying cryptocurrency are likely to be reflected in the investment vehicle too.
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