Bitcoin ETFs Could Soon Be Threatening Gold & S&P500

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Bitcoin has climbed astronomically owing to the heightened interest in it on the back of the recently launched Bitcoin Exchange-Traded Funds (ETFs).

For the 11 companies behind the now-offered Exchange-Traded Products (ETPs) had been long waiting for a fortunate announcement, there’s been a lot of fuss made regarding the eagerly-awaited Bitcoin-based investment vehicles, leaving interested investors plenty of time to strategize their portfolios, learn where to buy Bitcoin, and make room for the recently inaugurated products.

Savvy Bitcoin investors who held on to their assets are now rejoicing over the astral profits made owing to the ongoing capital influx into its underlying market, catapulting its price to new record highs the world has yet to see since November 2021. Now that Bitcoin is hurtling toward its all-time high price of over $69,000, many crypto analysts and gurus project its price well over that threshold in the following months, fueled by the growing demand for BTC ETFs.

These EFTs haven’t just met the world’s expectations but surpassed them to such a level that now, experts such as the likes of the MicroStrategy CEO, Michael Saylor, envision Bitcoin threatening the mighty market performance and investor interest of gold and S&P500. So, how accurate could their predictions be, and what can we expect from a future where crypto’s so hastily rising through the ranks?

Competition Between Gold, S&P 500, and Bitcoin Starts Shaping Up

Michael Saylor, the CEO of a global American company providing software, cloud services, and business intelligence, has recently expressed his amazement at the colossal success of the newly launched ETPs from the likes of Fidelity and Blackrock, two of the leading investment firms of the moment. These assets have gained such traction that they’re now sparking speculation and considerations that the rising Bitcoin dominion could threaten the supremacy of the S&P 500 and gold.

Saylor underscored some unforeseen dynamic fluctuations in the global investment landscape during the Bitcoin Atlantis conference spanning 1 to March 3 of this year, in Madeira, where over 120 crypto pundits and 5K participants flocked to discuss the latest in the asset’s innovation and adoption. At the interview’s moment, a line-up of famous tech luminaries was present, such as Jack Mallers, Jack Dorsey, and Jeff Booth, all making their points as to how they perceive Bitcoin’s future social, economic, and technological implications.  

Gold vs. Bitcoin—The Dawn of a Contention?

Originally viewed as a variant of gold, Bitcoin has succeeded in making strides to the outstanding position where it seems like it will soon raise the bar for gold as the market cap grows and investors’ demand for the asset climbs to new peaks. Gold and Bitcoin, some usually correlated asset classes for their similarities and resembling underlying purposes, should shock you not when being discussed in parallel.

One’s price never impacts the other’s valuation, as gold’s price is monitored through a global tracking system that secures its originality. In contrast, Bitcoins are easily tracked down in public ledgers, where they’re stored by default. They’re similar in that they’re both speculative and involve some level of risk when being invested in, even if Bitcoin surpasses gold in volatility by a wide margin. However, the dynamics of the two have a lot to say on how the investment landscape changes, and the latest examples have a lot of potential to demonstrate this theory.

On March 5, gold and BTC alike seized new record highs and called it a day, stealing the limelight from fiat money as both are perceived as hedges against inflation.

Bitcoin’s Moving Up The Ladder

The current shift registered in the investment realm emphasizes Bitcoin’s expanding endorsement and its ability to reshape the asset classes that have long made the financial ecosystem as we know it. Fast forward, and the launch of the investment vehicles of ETFs has boosted investor interest even more, succeeding in attracting net inflows surpassing a shocking $8.5B over just two months after their release. Such a celestial performance is further emphasized by the colossal capital that flew from traditional BTC investment tools such as the Grayscale BTC Trust.

Overall, two months into their debuts, some Bitcoin ETFs recorded the heaviest inflows ever inventoried by such an investment vehicle, with those from Fidelity Wise BTC Origin Trust and iShares BTC Trust topping the list.

Now, BTC ETFs Have Joined The Ranks of The Most Traded ETFs

The rising appetite for BTC ETFs is mirrored by the current trading volumes, underscoring their climbing position among the most traded ETFs to date. Bitcoin ETFs are among the 20 most traded ETFs on a daily basis, collectively exceeding the volume of iconic market mammoths like Microsoft not long ago.

Such heightened activity registered in the BTC ETF landscape not only symbolizes increased adoption levels and high market liquidity but also the rising enthusiasm of some of the largest institutional investors, or whales, into acquiring Bitcoin-based funds. Investors have lately started seeing a valuable asset with a lot of potential to grow in time, shielding their money from inflation. Bitcoin isn’t only regarded as a deflationary asset. Still, the optimistic outlook held encourages an increasing category of investors to believe they’ll generate large profits in the new bull cycle, especially as the reputed halving approaches.

ETFs Invite More Investors To The Bitcoin Table

ETFs are known to boost exposure to Bitcoin, as they enable interested tycoons to reap the benefits of such investment without actually possessing the digital coin itself. Shares of these funds trade on the usual stock exchanges, streamlining the investment process for the small category of investors that didn’t feel comfortable enough using crypto exchanges and such services specifically created to help crypto enthusiasts navigate the market.

The MicroStrategy CEO compared EFs with “universal APIs, as they bridge the gap between investors and their desired Bitcoin-based investments. These new developments have almost removed the barriers for those who found investing in Bitcoin a complex undertaking, making the revolutionary digital currency as attainable as stocks and bonds.

Wrapping it up

The applications of Bitcoin ETFs are bringing more investors to the table, accommodating the revolutionary crypto coin in the landscape of the most widespread and used investment tools. Unsurprisingly, owing to the wide range of functionalities and opportunities heralded, Bitcoin may keep eating into the shares of some of the most valuable financial assets.

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