Experts say Bitcoin ETF assets under management will exceed gold ETFs by the end of the year

Author: Liu Kun who loves to buy at the bottom

The assets under management of spot Bitcoin ETFs have exceeded $100 billion in one year and are now challenging to surpass gold ETFs.

In the past two weeks, there has been huge inflows into spot Bitcoin ETFs, with IBIT under BlackRock bearing the brunt. Last week, the total assets under management of Bitcoin exchange-traded funds (ETFs) exceeded $100 billion, and market analysts expect it to surpass gold ETFs by the end of the year. Of course, this goal will be achieved if the inflows maintain momentum and the price of Bitcoin soars to a record high.

Can Bitcoin ETFs surpass gold ETFs by the end of the year?

Nate Geraci, cryptocurrency industry expert and president of ETF Store, said that spot Bitcoin ETFs have the potential to surpass gold ETFs by the end of this year. As said, the Bitcoin exchange-traded fund market has grown to a size of $100 billion in less than a year since its launch.

On the other hand, the gold ETF market has soared to $271 billion as of September, according to the World Gold Council. Moreover, data shows that despite a surge in Bitcoin ETF inflows in November and December, gold ETFs saw outflows for the first time in six months. Therefore, the gap between the two is narrowing rapidly.

Geraci noted that the outcome of his prediction may depend on the comparative performance of Bitcoin and gold prices in the coming weeks. He also pointed out that physical gold ETFs were launched 20 years ago, so the development of BTC ETFs is "astonishing."

Since Thanksgiving, BackRock’s iShares BTC ETF (IBIT) has attracted more than $4 billion in inflows, an achievement that makes it the second-largest ETF to launch in 2024. On Friday, BlackRock’s IBIT attracted another $393 million in inflows, bringing its total inflows to nearly $36 billion.

BTC Could See a Short Squeeze

According to recent analysis from 10x Research, tightening Bitcoin supply could set the stage for a potential price squeeze. The report highlighted significant outflows from exchanges, driven by growing demand from Bitcoin ETFs and corporate accumulation funds like MicroStrategy. All eyes will be on next week’s FOMC meeting to determine whether BTC price action can set new all-time highs.

In the past 30 days, 124,000 Bitcoins have flowed out of exchanges on a net basis, indicating a decline in liquidity. Top cryptocurrency exchanges such as Coinbase, Binance, Gemini, OKX, etc. have seen a 7-10% withdrawal of BTC reserves.

If these trends continue, coupled with strong demand, the market could face a severe Bitcoin supply crunch. The launch of Bitcoin ETF options could exacerbate this situation, potentially triggering a gamma squeeze and further exacerbating price pressure

At press time, Bitcoin prices rose 2% to $101,953, with a market capitalization of over $2 trillion. According to Coinglass, 24-hour liquidations were $38.6 million, with short liquidations surging to $26.6 million.