Spot Bitcoin ETFs Giving Gold a Tragic Smackdown

The reign of spot Bitcoin ETFs is gradually threatening the existence of gold considering the volumes of flows that the new asset class has seen in the past weeks.

Spot BTC ETF Inflows Currently Topping the Charts

According to Senior Bloomberg ETF analyst Eric Balchunas, spot Bitcoin ETFs’ gain in store of value smackdown is currently contributing significantly to gold’s present pain. 

The spot Bitcoin ETF industry has registered massive inflows, more than $10 billion in the space of six weeks. This marks a massive milestone as not many assets have registered such a volume of transactions in such a short time 

Gold's Pain is Bitcoin ETFs' Gain in Store of Value Smackdown.. new from me on how gold being in the gutter is like the cherry on top for bitcoin fans who just got to witness the biggest ETF launch ever. Decent chance bitcoin ETFs pass gold ETFs in aum in less than 2yrs w… pic.twitter.com/rXJra1dyhF

— Eric Balchunas (@EricBalchunas) February 26, 2024

Markedly, Bitcoin inflows have been so strong that gold disruption was expected by some market observers including the author of “Rich Dad, Poor Dad” Robert Kiyosaki. Around mid-February, insights provided by on-chain data provider Checkmate showed that Bitcoin was steadily closing the gap on Gold. 

Even analyst Bitcoin Munger went ahead to highlight that Gold was missing in the top 20 assets with strong inflows. The sentiment has driven a sheer resilience in the price of Bitcoin which at the moment is up by 2.65% in 24 hours to $52,647.68.

What Does Bitcoin ETF Hold for Traditional Assets?

Munger went on to say that BTC’s disruption of gold could occur at a pace faster than anticipated by gold bugs, the term given to core proponents of the precious metal. In no distant time after he made this statement, gold’s dominance was becoming more threatened by spot Bitcoin ETF netflows which had gone beyond $5 billion.

Additionally, Kiyosaki predicted that the price of gold would crash amidst the jump in spot Bitcoin ETF inflows. He was looking at the gold price hitting $1,200, while there was a surge in Bitcoin and silver. The market outlook when he made his speculation substantiated the bold declaration as the spot Bitcoin ETF product strongly experienced more inflows than gold ETFs. 

Just last week, BTC ETFs recorded about $777.79 million inflows and this record came despite the market experiencing huge outflows, especially from Grayscale’s GBTC. In the same period, gold ETFs saw a total net outflow of $608.24 million. While figures like this may suggest that there is a direct transfer of assets from gold ETFs to spot Bitcoin ETFs, this may not be the case.

However, investors are consistently getting more attracted and attached to spot Bitcoin ETFs and this is likely to impact not just gold but other traditional assets as well. 

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