Since the United States Securities and Exchange Commission (SEC) approved Bitcoin ETFs on January 11, 2024, the crypto market has seen a significant recovery. This culminated on March 14, 2024, when Bitcoin (BTC) reached a new all-time high (ATH) of $73,737.
This upward trend is not just limited to the US. Hong Kong has just launched its spot Bitcoin and Ethereum ETFs, while Australia is preparing to launch its own versions of spot Bitcoin ETFs.
The global enthusiasm reflects the community’s optimistic view towards Bitcoin not just as a currency, but as a possible digital counterpart to gold.
Can Bitcoin ETFs Help Sustain an 8-Year Rally?
Bitcoin’s narrative as a store of value and hedge against inflation brings it closer to gold’s market position, with comparisons now extending to their respective ETFs. Historical precedents provide a compelling plot.
The launch of the gold ETF in 2004 triggered a nearly 8-year bull market. The first gold ETF, SDPR Gold Shares, was listed on the New York Stock Exchange (NYSE) on November 1, 2004, when gold was priced at US$450.80 per ounce. It then grew steadily, reaching $1,825 on August 1, 2011. In 2024, gold successfully reached the price of $2,392 on April 19.
However, according to a post by crypto YouTuber Altcoin Daily on Twitter (X), BlackRock’s Bitcoin ETF achieved in 70 days what took the gold ETF to over 800 days in assets under management (AUM). He highlighted the unprecedented demand for Bitcoin compared to the early days of gold in the ETF sphere.
“This is just the beginning…” https://twitter.com/altcoindailyio/status/1784683073843650932?s=46&t=3iAFD_WHRWDFSLixlrJyWg the Altcoin Daily.
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Read more: What is a Bitcoin ETF?
In support of this outlook, Bitcoin analyst Willy Woo pointed to current fiscal dynamics.
“Now that Bitcoin’s monetary inflation rate has fallen below that of gold, it will be interesting to see if its market capitalization will exceed gold in line with the stock-to-flow thesis [S2F]”, https://twitter.com/woonomic/status/1782997205928038590?s=46&t=3iAFD_WHRWDFSLixlrJyWg Woo.
He predicts that Bitcoin will align with its S2F valuation, but with a lag of 5 to 10 years. Woo cites the slower pace of global financial systems in adopting such innovations.
Long-term uptrend
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Bitcoin’s technological architecture could give it another advantage over gold. Events like halving are designed to reduce the number of new BTC entering the market, theoretically increasing its value over time.
In fact, historically speaking, post-halving periods have led to substantial price increases. The 2012 halving preceded a jump from $12 to over $1,000 in late 2013. Similarly, the 2016 halving saw prices rise from around $650 to nearly $20,000 in December 2017. Finally, the 2020 halving took prices from around $8,000 to $69,000 in November 2021.
These patterns suggest a bullish outlook, albeit with the caveat that price increases are typically long-term and not immediate. Analyst PlanB reaffirmed this. He predicted significant future growth despite short-term fluctuations.
PlanB noted a bullish outlook that aligns with historical data and market analysis despite current market swings.
“BTC > $100,000 in 2024. Top BTC > $300,000 in 2025,” https://twitter.com/100trillionusd/status/1780586891735101653 PlanB.
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Prices retreat despite ETF success
However, regardless of speculative optimism and historical trends, the current market movement paints a different picture. At the time of writing, Bitcoin is trading at $62,035, a slight drop of 0.47% in the last 24 hours.
Likewise, spot gold is also experiencing modest movement, trading at $2,311. This number represents a drop of approximately 1.02% compared to yesterday’s price.
Additionally, data from SoSo Value indicates that US spot Bitcoin ETFs recorded daily outflows of $51.53 million on April 29, 2024. This marks the fourth consecutive day of negative inflows. Even BlackRock’s previously top-performing iShares Bitcoin Trust (IBIT) saw no new inflows during the period.
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Read more: Bitcoin Price Prediction for 2024/2025/2030
These indicators suggest a cautious approach. While the excitement around Bitcoin ETFs is palpable and comparisons to the rally driven by gold ETFs are tempting, the reality on the trading floor tells a story of volatility and speculative uncertainty.
With its complex interplay of technology, economics, and global regulations, Bitcoin presents a unique investment prospect that may or may not parallel gold’s historic rise. Investors and spectators alike would do well to watch these developments closely, considering both the potential and pitfalls of this digital asset class.
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