Bitcoin ETFs Surge: Half the Assets of Gold ETFs in Just 10 Months

Bitcoin ETFs: The Best-Performing Asset of 2024

Bitcoin ETFs Surge – U.S.-listed Bitcoin exchange-traded funds (ETFs) have seen explosive growth since their launch in January 2024, amassing $23.89 billion in inflows and reaching a total of $70 billion in net assets. This rapid accumulation is particularly striking when compared to gold ETFs, which have been around for two decades and currently hold $137.3 billion in assets, according to the latest data from the World Gold Council.

Rapid Adoption Reflects Mainstream Interest

The recent surge in Bitcoin ETF popularity illustrates a marked increase in mainstream interest in digital assets. With daily inflows fluctuating between $192 million and $893 million, the Bitcoin ETFs are not only attracting attention but also breaking records for inflows. As Nate Geraci, president of The ETF Store, noted on Twitter, Bitcoin ETFs have quickly captured over 50% of the assets that gold ETFs have built up over two decades.

Ryan McMillin, chief investment officer at Merkle Tree Capital, commented on the situation, stating, “There is no question that the BTC ETFs have been well received, breaking all inflow records as they go.” This suggests that investors are increasingly viewing Bitcoin as a viable asset class, aligning it with more traditional investment strategies.

A Comparison of Safe Havens

While both Bitcoin and gold are often compared for their roles as safe havens, they serve different purposes. Gold has a long-standing reputation as a stable hedge against market volatility and inflation, whereas Bitcoin is being recognized as a digital alternative due to its finite supply and separation from conventional financial systems.

Jurrien Timmer, director of Global Macro at Fidelity Investments, frequently describes Bitcoin as “exponential gold,” highlighting its rapid adoption and inherent scarcity. This perspective underlines Bitcoin’s evolving value proposition as a store of value, supported by network growth and limited availability.

Performance Metrics

In 2024, Bitcoin has emerged as the best-performing asset, climbing 65% year-to-date to reach $69,533. Meanwhile, gold has also performed admirably, with prices increasing 16% to $2,746.09 per ounce. Despite a recent dip of more than 4% for Bitcoin, McMillin remains optimistic about the asset’s year-end performance, suggesting that the recent sell-offs may be related to portfolio rebalancing rather than a sustained downward trend.

“We’ve seen a few sell-offs, which could be larger funds reweighing their portfolios to take some gains, or it could very likely be a little volatility as we get closer to the US election,” McMillin explained. He added, “I wouldn’t expect we go much lower here, not without a serious catalyst.”