Bloomberg Intelligence ETF analyst Eric Balchunas said Bitcoin exchange-traded funds could go through market cycles similar to gold ETFs over the long term. Balchunas argued that the course of the SPDR Gold Shares ETF over the past two decades may be one of the closest historical examples to understand how BTC ETFs may evolve as institutional investment vehicles.
Similarity to gold ETFs
According to Balchunas, both gold ETFs and Bitcoin ETFs turn non-cash flow producing assets into investment products. Unlike stocks or bonds, the performance of these instruments depends on investor demand rather than corporate profits, interest payments or public support. Therefore, institutional entries and investor interest play a decisive role in price movements.
Balchunas, who monitors ETF markets at Bloomberg Intelligence, stated that Bitcoin ETFs could follow a similar scenario. According to him, sharp rises, heavy retreats and periods of recovery that may test investors’ patience may come to the fore in this process.
Eric Balchunas emphasizes that Bitcoin ETFs may follow a similar cycle of strong rises, painful declines and patience-testing recoveries.
GLD data points to fluctuation in corporate demand
According to Bloomberg Intelligence data shared by Balchunas, the asset size of the SPDR Gold Shares ETF has fluctuated sharply in recent years. The size of the fund increased to approximately 76 billion dollars in one period, and then decreased to around 22 billion dollars. Then it approached 84 billion dollars, fell again to around 48 billion dollars, and recently reached approximately 190 billion dollars.
The analyst noted that a similar picture was seen in ETF rankings. SPDR Gold Shares briefly rose to become the world’s largest ETF in 2011, but lost momentum in subsequent years. Similarly, BlackRock’s iShares Bitcoin Trust fund, after briefly exceeding its asset size of over $100 billion, entered a period of slower growth due to the horizontal course of the market.
Mini glossary: An ETF is an exchange-traded investment fund that tracks an asset or basket of assets. IBIT, on the other hand, is known as BlackRock’s iShares Bitcoin Trust fund based on spot Bitcoin.
| Product | Featured data | Observed situation |
|---|---|---|
| SPDR Gold Shares | $76 billion, $22 billion, $84 billion, $48 billion, $190 billion | Higher highs with sharp fluctuations in the long term |
| iShares Bitcoin Trust | over 100 billion dollars | Slower asset growth after rapid growth |
Demand and inflows determine Bitcoin ETFs
Unlike traditional stock investments, the value of Bitcoin ETFs is directly based on the underlying crypto asset and investor demand. Balchunas said that new supply on both the gold and BTC side is relatively limited, so fund inflows can create significant increases in prices during periods when demand accelerates.
However, he pointed out that corporate demand does not move in a straight line. Balchunas notes that investor interest may come in waves rather than a steady stream, so it wouldn’t be surprising if volatility remained even as long-term adoption increased.
Balchunas emphasizes that demand does not progress continuously and at the same pace, and can strengthen or weaken in waves, and points out that investors should be prepared for volatility.
Enterprise adoption is in the early stages
This comparison is important because Bitcoin ETFs are still relatively early in terms of institutional adoption. While gold ETFs have been traded for more than two decades, pension funds, asset managers and registered investment advisors continue to consider BTC ETFs as regulated investment vehicles in diversified portfolios.
Balchunas also reminded that historical similarities do not guarantee future performance. However, analysis offers investors the opportunity to read market cycles in a broader context. Fund inflows, regulatory developments and institutional participation are expected to be among the key factors in the growth of BTC ETFs in the coming period.
