With BlackRock’s iShares Bitcoin Trust leading the charge, Bitcoin’s market trajectory is drawing parallels with gold’s post-ETF launch boom, hinting at potentially even greater growth ahead.
While some analysts, like Mike Novogratz, have forecast a correction in Bitcoin price to the $40,000-$50,000 range before it reaches new records, the number-one cryptocurrency continues to defy expectations with new highs set almost daily. This strength can largely be attributed to the unexpectedly strong demand for spot bitcoin ETFs from institutional investors.
According to Grayscale CEO Michael Sonnenshein:
“The financial industry has never seen such insatiable demand for an ETF wrapper as it has with Bitcoin ETFs.”
Institutional investors continue to pour significant funds into spot bitcoin ETF products, with the amount of tokens held recently reaching a record 3.94% of the total supply, equivalent to almost 775,000 BTC.
Source: crypto-etfs.com
Interestingly, this growth is primarily driven by a select few funds, the main contributor being the iShares Bitcoin Trust (IBIT) from BlackRock. This fund has accumulated over 164,500 BTC, valued at approximately $10.6 billion at current bitcoin prices.
The American multinational investment company stands as the world’s largest asset manager, with assets totaling $10 trillion as of December 31, 2023. In this context, $10.6 billion represents a mere 0.1% of its total holdings.
Source: crypto-etfs.com
Remarkably, IBIT has garnered over $10 billion in assets under management in just seven weeks, a feat that took the United States’ first gold ETF, SPDR Gold Shares (GLD), over two years to achieve following its launch in 2004.
Given this explosive growth, it is conceivable that Bitcoin ETFs could surpass gold in total holdings within the next few months, especially if overall market economic conditions improve, potentially leading to even higher growth rates.
Source: x.com
Following the initial listing of spot gold ETFs, the price of gold experienced a significant surge, increasing almost fourfold in the subsequent years. Many investors believe Bitcoin could follow a similar trajectory. This raises the question of whether we could see Bitcoin reaching $200,000?
Source: x.com
It is crucial to recognize that, with gold currently boasting a market cap of $14 trillion and Bitcoin’s market cap at $1.2 trillion, there is substantial room for growth. Moreover, Bitcoin is more than just “digital gold”, it represents a gateway to the entire Web3 ecosystem, making it enturely possible that we will eventually see BTC trading at a higher market cap than gold.