Bitcoin: ‘Good time in ETF land’ means you should replace gold with BTC?

• Bitcoin ETFs’ $12 billion success could be a sign of mainstream acceptance
• BTC’s ability to offer returns without much volatility has gained recognition too

Bitcoin ETFs’ recent success, which have garnered $12 billion in just two months since approval, highlights the rapid growth and acceptance of cryptocurrencies within mainstream finance. In a recent conversation on the Bankless podcast, Matt Hougan, CIO of Bitwise Asset Management, expressed surprise at the scale of this success. He noted, 

“I think there’s a second acceleration coming that may even dwarf this first one. So, it’s a good time in ETF land.” 

According to the exec, over the next year or so, this could lead to more people using cryptocurrencies and pushing Bitcoin [BTC] prices higher as more money flows into these ETFs.

Bitcoin’s growing popularity

Bitcoin’s role is increasingly recognized as a diversification asset offering potential risk-adjusted returns. Within the financial realm, opinions on cryptocurrency vary widely, ranging from die-hard enthusiasts to cautious skeptics. However, such opinions are increasingly growing more positive. 

Offering a similar analysis, Ryan Rasmussen, CEO of Bitwise, said, 

“I would say that those individuals that are into crypto, they’re probably advocating for 3% to 5% of portfolios invested in Bitcoin or invested in a crypto index and then you have the skeptics who think 1% is outrageous.” 

Bitcoin v. gold 

Despite its good returns, in some quarters, Bitcoin’s entry into portfolios is still met with skepticism, especially in comparison to traditional assets like gold. In fact, some argue that Bitcoin’s inclusion offers negligible benefits, with it accused of not boosting returns in times of inflation. 

However, proponents propose shifting some gold investments into Bitcoin, highlighting its ability to improve returns without much downside risk.

Remarking on the same, Rasmussen elaborated, 

“If you just take a small portion of that maybe 50% of your 3% gold allocation or 50% of your 1% gold allocation and you shift that over into Bitcoin the impact it has on the potential for returns without really impacting the downside is really hard to ignore.”

This is a sign that with Bitcoin ETFs gaining traction, Bitcoin could surpass gold’s market cap in the near future. Bitcoin ETFs possibly flipping Gold ETFs could signify a major milestone in finance, showcasing Bitcoin’s rising popularity among traditional investors.

Hence, with ETFs reflecting investor sentiment, sustained demand could stabilize Bitcoin’s price, particularly with the halving coming up.