Bloomberg ETF analyst Eric Balchunas said Bitcoin ETFs could eventually reach three times the assets of gold ETFs, citing younger investors, falling volatility, and stronger sales activity around Bitcoin funds as key drivers.
Balchunas's view centers on a long-term demographic shift rather than a claim that Bitcoin has already replaced gold as a store of value. He noted that younger investors are more likely to grow up treating Bitcoin as a store of value, potentially giving Bitcoin ETFs an advantage as those investors accumulate capital over time.
Volatility and Market Maturity
Bitcoin's main challenge with investors is volatility, according to Balchunas. Currently, gold is less volatile than Bitcoin, and volatility remains the primary concern investors cite when considering the cryptocurrency. However, if Bitcoin's volatility continues to move closer to gold's levels, Balchunas expects larger institutions to become more comfortable using it as a store of value or safe haven asset.
Balchunas described Bitcoin as "gold as a teenager," contrasting its roughly 17-year history with gold's much longer track record. He noted that Bitcoin has traded more like the Nasdaq 100 for years, giving it a reputation as a high-beta asset closely tied to stocks.
Sales and Distribution Advantages
Balchunas highlighted distribution as a critical factor. Bitcoin ETFs have "way more enthusiasm and sales firepower" than gold ETFs, he said. Wholesalers familiar with both crypto and the habits of older investors are actively educating clients about Bitcoin ETFs, whereas comparable sales activity around gold ETFs is minimal.
Balchunas stressed that his outlook does not mean gold will disappear. "Gold isn't going anywhere," he wrote. "I just think it will be lapped by Bitcoin ETFs as a category long term."
Current ETF Flow Data
Recent fund data presents a mixed picture. US spot Bitcoin ETFs recorded $159.45 million in net inflows on September 17, following significant outflows of $295.98 million on September 16 and $450.33 million on September 15. For the week through September 17, the ETFs had combined net outflows of $426.81 million. Cumulative inflows stood at $54.73 billion, with total net assets of $96.25 billion, representing 6.26% of Bitcoin's market cap.
