Bitcoin ETFs siphoning gold investments? VanEck CEO weighs in
Observers of the market have often theorized that the American spot Bitcoin [BTC] Exchange-Traded Funds (ETFs) might captivate investments away from Gold ETFs. This notion has materialized, claims Jan Van Eck, the Chief Executive Officer of VanEck.
Amidst the events of Paris Blockchain Week 2024, the executive from VanEck highlighted that despite achieving record heights and a 14% increase in 2024, Gold ETFs are experiencing withdrawals.
"US-based Gold bullion ETFs are witnessing withdrawals this year, even though the gold price has soared to all-time highs and risen by 14%," he said.
Furthermore, Van Eck mentioned that a Google search analysis reveals a growing investor interest in 'Bitcoin over gold.'
Notwithstanding these developments, the demand for US Bitcoin ETFs saw a plateau, even as they accumulated approximately 30K BTC in May.
Stagnation in Bitcoin ETF Demand, Yet...
During May, the US spot BTC ETFs witnessed net additions, amassing 29.5K BTC, even considering the GBTC sales.
As of 31st May, the ETFs experienced a net inflow of $48.7 million, according to Soso Value data. BlackRock's IBIT was at the forefront with $169 million, followed by Fidelity's FBTC which added $5.9 million.
Showcasing a contrast, Grayscale's GBTC reported outflows of $124.3 million last Friday, as per data from Farside Investors.
Plotting the overall demand for spot BTC ETFs against the BTC price revealed a parallel stagnation in both demand and price.
Nonetheless, there's potential for BTC to commence a breakout run. The premier cryptocurrency has reached a pivotal moment similar to the one before 2017's explosive increase – surpassing the US money supply. Crypto analyst TechDev points out,
"In 2021, the increased money supply drove $BTC to new highs in USD terms. In 2024, its rise is attributed to its demand (thus breaking free from M1). Considering the expected growth in M1, $BTC is likely to exceed projections based partly on 2021's data."
Another analyst, Peter Brandt, anticipates, using conventional historical data, that this market cycle's peak could reach $130K-$150K per BTC by August 2025.
However, BTC is currently in its third month of price consolidation and needs to surpass this range to solidify the trend of upward momentum.
