Bitcoin ETFs could ‘maybe triple gold ETFs,’ explains analyst – How?

• ETF analyst expects Bitcoin ETFs to surpass gold ETFs in upcoming years.
• BTC ETFs see outflows for the third consecutive day.

In a recent interview with Natalie Brunell, Eric Balchunas, senior ETF analyst at Bloomberg, predicted an impressive future for Bitcoin [BTC] ETFs. 

The analyst forecasted a substantial growth trajectory, stating, 

“They’re [BTC ETFs] going to pass gold ETFs and maybe triple gold ETFs over the years.”

Bitcoin ETFs’ edge over gold ETFs

Gold has traditionally been the go-to asset for investors seeking a safe haven during economic uncertainty. It offers stability as a hedge against inflation and currency devaluation. 

However, Balchunas elaborated that Bitcoin brings an entirely different dimension to this space. Gold’s steady but slow-moving value, while appealing to some, lacks the “spice” that many modern investors crave.

While often seen as a downside, Bitcoin’s volatility is actually part of its appeal in today’s market, the analyst noted. It serves as a high-risk, high-beta investment that appeals to investors looking for potential growth beyond what gold can offer.

Bitcoin: The “Second Amendment of money”

Another intriguing concept Balchunas discussed was Bitcoin as the “Second Amendment of money,” a phrase borrowed from author Benjamin Hart. 

The analyst explained that just as the Second Amendment in the United States provides a measure of protection for citizens, Bitcoin offers a form of financial sovereignty. 

It safeguards users from governmental monetary policy and the potential for inflation through excessive money printing.

Balchunas also likened Bitcoin’s present state to a “teenager” with a rebellious streak, one that could eventually mature but currently brings energy, volatility, and a bit of unpredictability. He quipped,

“It’s teenager gold…if you could take the 4,000-year-old gold and go back to when it was 16 years old, it was probably behaving similarly.” 

How are Bitcoin ETFs doing?

Meanwhile, Balchunas noted that while he and fellow analyst James Seyffart projected $10-15 billion in net flows for the first year, the total has already reached close to $24 billion. 

He acknowledged that Bitcoin ETFs have,

“Definitely defied our expectations.”

Balchunas highlighted that this growth rate was remarkable, especially when compared to gold ETFs, which took four to five years to reach a similar level of inflows.

The analyst also addressed that while the inflow numbers could change, particularly if external factors like the upcoming U.S. election or an economic downturn were to impact the market, Bitcoin ETFs have shown resilience. 

Despite this growth, BTC ETFs are not immune to fluctuations. Data from SoSo Value revealed that ETFs have had three consecutive days of outflows since November.

On the 5th of November, the total daily total net outflow was $116.90 million. 

Source: SoSo Value

Worth noting that BTC ETFs’ total assets under management remain robust at $69.28 billion, representing around 5.04% of Bitcoin’s overall market cap.