Assessments are growing that spot Bitcoin ETFs could surpass gold ETFs in total assets under management. It is stated that investor demand is not limited to the “digital gold” narrative, and that Bitcoin can find a wider place in portfolios with its different usage areas.
Bitcoin’s versatile usage area stands out
James Seyffart, an ETF analyst at Bloomberg Intelligence, states that Bitcoin offers different functions for investors. Seyffart, known for his ETF analyzes of financial markets, is especially known for his studies examining the place of digital assets in traditional portfolios.
Seyffart stated that Bitcoin is considered not only as a store of value, but also as a portfolio diversification element and a form of digital capital. In addition, he stated that the asset is seen as a growth-oriented and risky investment tool.
There are multiple reasons to add Bitcoin to portfolios; Growth expectation and liquidity theme are the main ones.
While gold is considered to have a more limited usage framework, it is thought that Bitcoin’s versatile structure may support it to reach a larger volume on the ETF side. Therefore, it is predicted that Bitcoin ETFs may exceed gold ETFs in the long run.
Fund flows and market trends attract attention
While there was an outflow of $2.92 billion from US-based gold ETFs in March, a net inflow of $1.32 billion was recorded in spot Bitcoin ETFs in the same period. This picture indicates that there may be a gradual change in investor preference.
On the other hand, the daily outflow of $3 billion in GLD, one of the largest gold ETFs, on March 4 was recorded as one of the highest levels of the last two years. On the other hand, it is noteworthy that the interest of individual investors in gold has increased significantly in the last six months.
It seems that the price movements of the two assets have been largely parallel in recent weeks. While Bitcoin was trading at $66,918, it lost approximately 8 percent in value in the last 30 days. The gold price displayed a similar performance, decreasing by over 8 percent in the same period.
Fidelity Digital Assets analyst Chris Kuiper reminded that historically, gold and Bitcoin have periodically outperformed each other. Stating that gold will come to the fore in 2025, Kuiper stated that it would not be a surprise if the leadership passes to Bitcoin again in the future.
