The managed assets of spot Bitcoin ETFs have exceeded $100 billion within a year and are currently challenging to surpass gold ETFs.
In the past two weeks, there has been a massive inflow into spot Bitcoin ETFs, with BlackRock's IBIT leading the charge. Last week, the total assets under management of Bitcoin exchange-traded funds (ETFs) surpassed $100 billion, and market analysts expect it to exceed gold ETFs by the end of the year. Of course, this goal will be achieved if the inflow maintains momentum and Bitcoin prices soar to all-time highs.
Will Bitcoin ETFs surpass gold ETFs by the end of the year?
Nate Geraci, president of the ETF Store and a cryptocurrency industry expert, stated that spot Bitcoin ETFs have the potential to surpass gold ETFs by the end of this year. As mentioned, the Bitcoin exchange-traded fund market has grown to $100 billion in less than a year since its launch.
On the other hand, according to data from the World Gold Council, as of September, the market size of gold ETFs surged to $271 billion. Furthermore, the data shows that despite a surge in inflows into Bitcoin ETFs in November and December, gold ETFs experienced outflows for the first time in six months. Thus, the gap between the two is rapidly narrowing.
Geraci noted that his forecasts 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, making the development of BTC ETFs 'astonishing.'
Since Thanksgiving, BlackRock's iShares BTC ETF (IBIT) has attracted over $4 billion in inflows, making it the second-largest ETF launched in 2024. On Friday, BlackRock's IBIT attracted another $393 million in inflows, bringing its total inflows close to $36 billion.
BTC may experience a short squeeze.
According to recent analysis by 10x Research, the tightening supply of Bitcoin may lay the groundwork for a potential price squeeze. The report highlights the significant phenomenon of Bitcoin outflows from exchanges, driven by the growing demand from Bitcoin ETFs and corporate accumulations such as MicroStrategy. All eyes will be on next week's FOMC meeting to determine whether BTC price trends can reach an all-time high.
In the past 30 days, there has been a net outflow of 124,000 Bitcoins from exchanges, indicating a decline in liquidity. BTC reserves at leading cryptocurrency exchanges such as Coinbase, Binance, Gemini, and OKX have been withdrawn by 7-10%.
If these trends continue, coupled with strong demand, the market may face a severe tightening of Bitcoin supply. The launch of Bitcoin ETF options could exacerbate this situation, potentially triggering a gamma squeeze and further intensifying price pressure.
As of the time of writing, the price of Bitcoin has risen by 2% to $101,953, with a market capitalization surpassing $2 trillion. According to Coinglass data, the 24-hour liquidation amount is $38.6 million, with short liquidations soaring to $26.6 million.
