In just over a month since their approval by the US Securities and Exchange Commission (SEC), Bitcoin ETFs have rapidly gained momentum in the market, posing a formidable challenge to long-standing dominance of gold ETFs.
The rapid rise of Bitcoin ETFs has led to a convergence in asset values, with BTC ETFs closing the gap with gold ETFs. Bitcoin ETFs hold approximately $37 billion in assets after just 25 days of trading, while gold ETFs have accumulated $93 billion in more than 20 years of trading.
According to data from the Coinglass portal, as of this Friday, Bitcoin products accumulated $37.29 billion in AUM. Meanwhile, gold ETFs have a total of approximately $93 billion in the same monetary denomination. In this way, cryptocurrency products already occupy more than a third of the total value of gold products.
The fact that Bitcoin ETFs already occupy 39.8% of the AUM of their gold rivals leaves no doubt about the future. If within a period of approximately one month they managed to get within that distance, everything suggests that in a few weeks they will surpass them. This becomes a huge moral victory for proponents of cryptocurrency as digital gold.
Bitcoin ETFs Gain Ground Against Gold ETFs
Bloomberg Senior Commodities Strategist Mike McGlone emphasizes the changing landscape, stating that “Tangible gold is losing its luster to intangible Bitcoin.” According to McGlone, the continued resilience of the US stock market, the strength of the US currency and 5% interest rates have presented headwinds for gold.
Furthermore, as the world increasingly embraces digitalization, the emergence of Bitcoin ETFs in the United States adds more competition to the precious metal. McGlone further states that while the bias towards gold prices remains bullish, investors who focus solely on gold may risk falling behind potential paradigm-shifting digitalization trends.
Ultimately, McGlone suggests that investors should consider diversifying their portfolios by incorporating Bitcoin or other digital assets to stay ahead in the changing investment landscape.
Bitcoin Rally Driven by Institutional Demand
The success of Bitcoin ETFs is further demonstrated by recent data suggesting that the upward trend in Bitcoin prices is primarily driven by institutional demand. At the same time, retail participation appears to be declining.
According to analyst Ali Martinez, as the price of Bitcoin continues to fluctuate between $51,800 and $52,100, there has been a notable decline in the daily creation of new Bitcoin addresses, indicating a lack of retail participation in the current bullish rally and highlighting the growing influence. of institutional investors in the cryptocurrency market.
However, market expert Crypto Con points to a significant change in the positions of long-term Bitcoin holders, indicating a possible downward movement. Based on a chart analyzed by the expert, the position reversal line crossed below -50.00 for the first time in over a year, a pattern that has historically occurred at critical times in market cycles. of Bitcoin.
These moments include the bottom of the cycle, the middle top (which occurred only once), and the start/end of a top parabola of the cycle (which occurred most frequently).
This recent change in the positions of long-term holders raises two possible scenarios: a medium or imminent parabolic movement. Such a move at this stage of the cycle is considered unusual. It indicates that long-term Bitcoin holders are exiting their positions in significant amounts, possibly anticipating a market correction or a change in the overall trend.
Overall, the change in Bitcoin holders’ positions and the decline in retail participation present contrasting dynamics in the current market landscape. While institutional demand continues to drive up the price of Bitcoin, long-term holders appear to be taking profits or adjusting their positions.
While BTC is currently trading at $51,800, it remains to be seen which direction the next move will take, and how institutions will continue to influence the price action of the largest cryptocurrency as spot Bitcoin ETFs gain traction.
By Leonardo Perez
