Can Bitcoin ETFs surpass gold ETFs in assets under management as Bitcoin continues to rise?
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Can Bitcoin ETFs surpass gold ETFs in assets under management as Bitcoin continues to rise?
It took gold ETFs several years to attract the same level of traffic as spot Bitcoin ETFs.
Navigating Web3 tides with focused insightsBy BEN STRACK
Translation: TechFlow
Introduction
Recently, Bitcoin ETFs have attracted significant inflows while gold funds show signs of outflows. Although some analysts believe this trend may not last, industry observers suggest that Bitcoin fund assets could one day surpass the $90 billion gold ETF market. This article explores capital flow trends between Bitcoin and gold ETFs and whether Bitcoin might eventually overtake gold in asset size.
Main Content
As spot Bitcoin ETFs continue to attract inflows six weeks after launch, investor capital appears to be shifting away from gold funds—though some believe this shift is unlikely to persist.
While analysts expect that Bitcoin ETF assets may one day exceed those held in gold funds, industry watchers note that the two markets are not directly comparable.
Since their January 11 listing, ten spot Bitcoin ETFs have seen approximately $5.5 billion in net inflows so far.
In contrast, according to ETF.com data, the largest gold ETFs—State Street Global Advisors’ SPDR Gold Shares (GLD) and BlackRock’s iShares Gold Trust (IAU)—have experienced net outflows of approximately $2.7 billion and $350 million respectively since then.
Click here for more: To gauge the impact of spot Bitcoin ETFs, analysts turn to gold.
Bloomberg Intelligence analysts Eric Balchunas and Andre Yapp said: “Even if little cash from gold flows directly into Bitcoin ETFs, their presence—and the excitement around these new funds, which by many measures mark the most successful launch ever—increases competition for gold.”
CoinShares data shows that interest in U.S. spot Bitcoin ETFs drove four consecutive weeks of net inflows into crypto investment products. Despite Grayscale Investments’ Bitcoin Trust ETF (GBTC) recording another week of outflows totaling about $430 million, the category still saw $598 million in net inflows last week.
Click here for more: Bitcoin ETF volumes surge after record inflow week for crypto products
Are gold and Bitcoin flows directly linked?
Bryan Armour, Morningstar’s director of passive strategies research, said he is reluctant to draw a direct link between Bitcoin and gold ETF flows. He added that the two assets represent fundamentally different types of investments.
“Gold may see outflows due to shifts in expectations around interest rate cuts or further market moves toward risk-on behavior—reasons consistent with how investors traditionally use gold within portfolios,” Armour noted.
“If risk appetite declines further, I expect this trend to reverse,” he added. “A bear market could push investors toward safe-haven assets and risk-off positioning, which would hurt inflows into Bitcoin.”
Matteo Greco, research analyst at Fineqia International, expects the opposing flow trend between Bitcoin and gold funds will eventually stop over the long term.
He pointed out that although some investors view Bitcoin as digital gold and thus reallocate capital from gold ETFs to Bitcoin ETFs, gold remains a safe-haven asset for many.
“I foresee this trend gradually slowing over time,” Greco said. “Gold will retain its respected status, while Bitcoin will gain increasing investment and recognition in the long run. I see it more as continued net inflows into Bitcoin ETFs rather than a direct transfer from gold to BTC.”
Will Bitcoin ETF assets surpass gold funds?
Despite GBTC seeing over $7.4 billion in outflows since converting to an ETF, it remains the largest in the category with nearly $22.8 billion in assets under management.
BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) hold approximately $6.6 billion and $4.7 billion in assets respectively.
So far, total assets under management for spot Bitcoin ETFs amount to nearly $38 billion. In comparison, gold ETFs hold over $90 billion in total assets, with GLD and IAU accounting for roughly $54 billion and $25 billion respectively.
Greco highlighted that gold ETFs took years to reach the same level of traffic now seen in spot Bitcoin ETFs. Following the long-awaited regulatory approval of Bitcoin ETFs, these funds had a historic start—IBIT and FBTC both grew to over $3 billion in assets within just one month of launch. By contrast, GLD only surpassed $1 billion in assets during its first 30 days of trading.
Greco said that as digitization and tokenization become increasingly common, Bitcoin ETF assets may eventually surpass those in gold funds.
“Without ETFs, traditional finance investors cannot directly access BTC, so the impact of these products could be even more transformative than what was seen when the first gold ETF was approved in 2004,” he said.
Balchunas stated on X that it's quite possible Bitcoin ETF assets could surpass those of gold funds within two years—but also acknowledged that such an outcome might still be in the “distant future.”
He noted: “I expect Bitcoin ETF inflows to remain positive and for Bitcoin to make progress, but reaching the $90 billion asset level of gold ETFs will require broader adoption and sustained strong performance from Bitcoin ETFs.”
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