Bitcoin ETFs Shatter Gold ETF Launch Performance

Bitcoin ETFs Shatter Gold ETF Launch Performance

Roughly one month after their launch, spot Bitcoin ETFs in the United States have managed to generate net flows of around $3 billion.

This saw them surpass the performance of gold ETFs at the time of their launch almost 20 years ago. This milestone is also inclusive of Grayscale’s fund.

This is even though GBTC has only seen its long-term investors cashing out, most likely switching to other competitive offerings.

The inflows

Data from BitMEX Research shows that if Grayscale is excluded, then the inflows are around $10 billion. As of late Monday, the inflows across other Bitcoin ETFs had reached a total of $9.6 billion.

Eric Balchunas, the Bloomberg ETF analyst, posted on X on Tuesday and said that it had taken almost two years for the GLD ETF to absorb the same capital that spot Bitcoin ETFs had done in the last 32 days.

SPDR Gold Shares had gone live on November 18th, 2024 and within three days of trading, it had surpassed $1 billion in assets. It trades under the GLD ticker on the NYSE.

However, after that, there had been a dramatic slide in volumes and data from Bloomberg shows that total known ETF holdings of gold had been short of ten million ounces for almost a year.

The comparison

Nonetheless, GLD is given the credit of contributing to a multi-year bull market for gold, which saw its price go from $400 at the time of launch to $1,800 in 2011.

The current spot price stands around $2,000. Similarly, the price of Bitcoin has also hit a two-year high of over $50,000 since the launch of the ETFs and there has been a huge tsunami of inflows.

It is worth noting that almost half of the net inflows were recorded within 3 days, at around $450 million a day.

On Monday, the total amount of inflows recorded stood at $493 million, which marked the third-strongest inflow day since they were launched.

The spike

Most of the recent spike is mostly due to the slowing down of outflows from the Grayscale Bitcoin Trust (GBTC).

Even though it is still the largest Bitcoin fund in the world, last month saw many investors dump their GBTC shares. This was to close a long-term arbitrage trade after the conversion of the fund into an ETF.

Others may have chosen to sell their shares to switch to one of the newer and significantly cheaper ETFs that were launched by Fidelity, BlackRock, and others.

These new funds do not show any signs of slowing down any time soon, as they have now reached almost $10 billion in net flows, excluding Grayscale.

Almost $30 billion in assets are held by Bitcoin ETFs, which is around 690,000 BTC and this makes it the second-largest ETF commodity in the country, with gold being the first.

Nearly $90 billion in assets are held by gold ETFs, with GLD alone holding a total of $54 billion.