Bitcoin ETF inflows

NAIROBI ( — Bitcoin Exchange-Traded Funds (ETFs) witnessed a record-breaking week, attracting $2.2 billion in net inflows. This influx surpasses any other ETF in the market, highlighting the growing interest in the world’s leading cryptocurrency. Analysts suggest this trend could significantly challenge gold’s position as the traditional store of value.

Strong Demand Propels Bitcoin ETFs to New Heights

Data from BitMEX Research reveals that the 10 Bitcoin ETFs collectively raked in $2.3 billion last week, eclipsing the inflows of any other ETF among the 3,400 currently available. This achievement underscores the immense investor appetite for Bitcoin exposure through regulated and transparent products.

Weekly crypto asset flows
Weekly crypto asset flows. Source: CoinShares

Eric Balchunas, senior ETF analyst at Bloomberg, emphasizes the significance of this milestone.

“This brings the total net flow to over $5 billion, exceeding even BlackRock’s overall inflows,” he tweeted, adding:

“This all happens while Grayscale Bitcoin Trust (GBTC) experiences net outflows. If we exclude GBTC, the numbers get even more mind-blowing.”

Gold’s Crown Under Threat?

The surging demand for Bitcoin ETFs coincides with a noticeable shift in investor sentiment towards gold.

ETC Group Head of Research André Dragosch spots an increasing divergence between global fund flows into Bitcoin and equivalent flows into gold. He argues that it could be an “early sign” of Bitcoin challenging gold’s position as the preferred store of value.

Dragosch further highlights the potential impact on Bitcoin’s price.

“If Bitcoin disrupted Gold and achieved Gold’s market cap of ~ $13 trillion, one single Bitcoin would trade more than $600k.”

he tweeted.

Experts remain cautious, acknowledging the significant gap between Bitcoin and gold regarding market capitalization. The combined market cap of Bitcoin ETFs and ETPs is roughly a third of global gold ETPs. However, Dragosch anticipates that “Bitcoin’s ETP and ETF market caps could leapfrog gold in the next two years via price appreciation.”

The future of the store-of-value landscape remains uncertain. Still, one thing is clear: Bitcoin ETFs are making a powerful statement, attracting significant capital and challenging traditional notions of value. With continued innovation and regulatory developments, Bitcoin’s influence on the financial world is poised to grow in the years to come.

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