Bitcoin ETFs Threaten Gold’s Dominance As Digitalization Trends Gain Momentum
17 February 2024 - 11:00AM
NEWSBTC
In just over a month since their approval by the US Securities and
Exchange Commission (SEC), Bitcoin ETFs have swiftly gained
traction in the market, posing a formidable challenge to the
long-standing dominance of gold ETFs. Bitcoin ETFs Gain Ground on
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 only 25
trading days, while gold ETFs have accumulated $93 billion in over
20 years of trading. In this regard, Bloomberg’s Senior
Commodity Strategist, Mike McGlone, emphasizes the shifting
landscape, stating, “Tangible Gold is Losing Luster to Intangible
Bitcoin.” According to McGlone, the US stock market’s
continued resilience, the US currency’s strength, and 5% interest
rates have presented headwinds for gold. Moreover, as the world
increasingly embraces digitalization, the emergence of Bitcoin ETFs
in the United States adds further competition to the precious
metal. Related Reading: Investment Firm Forced To Sell XRP Worth
$2.5 Million: Here’s Why McGlone further states that while the bias
for gold prices remains upward, investors who solely focus 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 evolving 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 driven
primarily 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 hover between
$51,800 and $52,100, there has been a noticeable decrease in the
creation of new Bitcoin addresses daily, indicating a lack of
retail participation in the current bull rally and highlighting the
growing influence of institutional investors in the cryptocurrency
market. However, market expert Crypto Con points out a significant
shift in Long-Term Bitcoin holder positions, signaling a potential
downside movement. Related Reading: VeChain Rules Top 100
Crypto List With 67% Rally Ahead Of Major Announcement As seen in
the chart below shared by Crypto Con, the position change line
crossed below -50.00 for the first time in over a year, a pattern
that has historically occurred at critical moments in Bitcoin’s
market cycles. These moments include the cycle bottom, mid-top
(which occurred only once), and the start/end of a cycle top
parabola (which occurred most frequently). According to Crypto Con,
this recent shift in long-term holder positions raises two possible
scenarios: a mid-top or an imminent parabolic movement. Such a
movement at this stage in the cycle is considered unusual.
Primarily, it indicates that long-term Bitcoin holders are exiting
their positions in significant numbers, possibly anticipating a
market correction or a change in the overall trend. Overall, the
shift in Bitcoin holder positions and the decline in retail
participation present contrasting dynamics in the current market
landscape. While institutional demand continues to drive the price
of Bitcoin higher, long-term holders appear to be taking profit or
adjusting their positions. While BTC is currently trading at
$51,800, it remains to be seen what the direction of the next move
will be and how institutions will continue to influence the price
action of the largest cryptocurrency as spot Bitcoin ETFs gain
traction. Featured image from Shutterstock, chart from
TradingView.com
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