An Exchange-Traded Fund (ETF) expert has boldly predicted that Bitcoin ETFs will soon outpace gold ETFs, highlighting the growing dominance of Bitcoin in the investment landscape. This claim is made when the institutional adoption and growth of the cryptocurrency market are unparalleled, indicating a dramatic change in investor tastes and asset allocation techniques.
The ETF expert claims that several reasons, such as institutional investment growth, the acceptance of cryptocurrencies as a legitimate asset class, and the need for alternative stores of value in the face of inflationary pressures and economic uncertainty, are responsible for the growing popularity of Bitcoin ETFs.
One of these ETF experts, Brian McGleenon wrote on The Block that the launch of the spot Bitcoin ETF has been linked to the demand for more than 4500 units of Bitcoins on trading days only. But only 921 new Bitcoins are minted everyday.
Experts Believe Bitcoin Qualities Make it More Attractive to Investors
The launch of Bitcoin ETFs provides institutional investors with a regulated and familiar investment vehicle to gain exposure to Bitcoin, further fueling demand for these products. The ETF expert highlighted the appeal of Bitcoin as a hedge against inflation and currency devaluation.
Bitcoin’s better qualities—such as its digital nature, portability, and divisibility—make it a more interesting investment option for contemporary investors, particularly younger generations who are more tech-savvy and receptive to cutting-edge financial goods.
James Butterfill, Head of Research at CoinShares, explained some of the event that could trigger a positive demand upsurge in the market. He noted spot bitcoin traded funds is yet to be available to the Registered Investment Advisor (RIA) market.
He explained that it takes up to three months trading data for funds companies to use by RIAs to issue new ETFs. There may also likely be a rapid increase in the number of investors to form the RIA market when it’s open for trading.
Analysis Hints Regulatory Validity As One of the Driving Factors
Tim Copeland, another ETF expert in his article on The Block, warned that investors must not overlook the associated risks linked to cryptocurrencies. He said investors must carefully weigh their risk options, investment objectives, and risk tolerance before making a financial commitment to the market.
Regulatory validity has been pointed out as the main factor driving the growth and the new adoption of Bitcoin ETF. As of press time, Brazil and Canada have announced their approval and official integration of the Bitcoin ETFs.
With its initial funding of $28.9 billion in assets during its launch, Grayscale’s Bitcoin Trust now has 11 spot Bitcoin ETFs and a cumulative $61 billion in Assets Under Management (AUM). The rising size is fast expanding, out-growing the gold, which currently has a total AUM of about $97 billion.
Analyst Eric Balchunas, a senior ETF Analyst with Bloomberg, replying to a question by The Block, confirming that “spot Bitcoin ETF will certainly surpass the gold ETF at some point, judging from its speed of growth. He added that such feet would be a good thing.”
Black Swan Linked to Bitcoin ETF Development
Balchunas added that he thinks the emergence of a black swan would be the only hindrance to Bitcoin ETF’s journey to a “price boom”. Balchunas referred to the Bitcoin ETF as “The Big Mo,” describing a situation where something triggers a momentum that would further push the demand higher. He mentioned such events as the presidential campaigns.
Balchunas further explained as long as the price of Bitcoin continues to comply and pushes higher, at least 3-4 times a week, it will remain unstoppable. When asked the reason behind such a possibility, Balchunas added that the “mojo is officially off the record.”
He remarked that the higher the price of spot Bitcoin goes, the more investors get FOMO, and prefer to get more involved, hence encouraging more inflow, which further pushes up the price. According to Balchunas, a significant drop in the equity markets may discourage the purported mojo.
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