A seismic shift is taking place in the investment landscape, as the World's largest asset manager's Bitcoin ETF overtakes its Gold counterpart.
What a change in fortunes has one week brought to the world of digital assets, especially the premier crypto kingpin, Bitcoin. Spurred by enthusiasm in the crypto market following Donald Trump’s win in the U.S. presidential election, BTC broke past its previous all-time high of $73,737, set in March. This political event appears to have reinvigorated investor confidence in Bitcoin, pushing it to new highs almost daily.
At the time of writing this, Bitcoin is valued at $87,540, having briefly approached $90,000 before encountering some resistance. This bullish momentum is driven by both political factors and the perception of Bitcoin as a hedge in times of economic or political uncertainty. If the trend continues, Bitcoin may soon break through the $90,000 barrier and head towards the all-important psychological level of $100,000.
And there are good reasons for this red-hot resurgence in the Cryptoverse. On the campaign trail, Trump promised to position the U.S. as a global leader in the digital asset industry, proposing initiatives like building a strategic Bitcoin reserve and appointing regulators favorable to digital assets. He also pledged to dismiss anti-crypto SEC Chair Gary Gensler, who has frequently criticized the crypto sector for widespread fraud and misconduct.
The growing popularity of Bitcoin is also reflecting other investment products. BlackRock’s iShares Bitcoin Trust has finally overtaken its well-established iShares Gold Trust in total assets, marking a critical moment in the financial sector and signaling a potential shift in how investors view Bitcoin relative to traditional safe-haven assets like gold. This event, as depicted in the chart below, demonstrates how rising demand for Bitcoin has propelled its ETF to new heights, even surpassing gold—a historically reliable store of value.
Analyzing the Bloomberg chart above, we can see a clear upward trajectory for the iShares Bitcoin Trust (represented in yellow) throughout 2024. Initially starting near zero in January, the Bitcoin ETF saw a steady climb over the months, ultimately reaching the same level as the Gold Trust (in black) by early November. This divergence in movement underscores the growing enthusiasm around Bitcoin and the diminishing momentum in the gold market.
On the other hand, The Gold Trust, displayed relatively stable performance, hovering between $28 billion and $30 billion throughout the year with little deviation. BlackRock's iShares Bitcoin Trust, now valued at $35 billion, saw a record daily net inflow of nearly $1.4 billion last Thursday. As a result, the fund has now overtaken the $33 billion iShares Gold Trust in total assets, as investors increasingly turn to what many view as "digital gold."
Gold has traditionally served as a safe haven during economic uncertainty, offering stability and inflation protection. However, Bitcoin's recent outperformance and rapid growth suggest it's being seen as a modern alternative, especially by younger investors drawn to digital assets. The shift from the iShares Gold Trust to the iShares Bitcoin Trust indicates that even traditional investors are exploring Bitcoin not just for growth, but also as a hedge. While gold remains valued as a store of wealth, Bitcoin's strong performance in 2024 shows its potential to coexist with—or even rival—traditional assets.
The ascent of BlackRock's iShares Bitcoin Trust over its Gold Trust may be more than just a headline - it represents a symbolic shift in the world of finance. Bitcoin, once considered a fringe asset, has now grown into a formidable competitor for gold, largely due to its recent price highs and the institutional interest surrounding it. As investors increasingly embrace digital assets, the competition between Bitcoin and gold may intensify, shaping a new era of investment where digital and physical assets vie for prominence in diversified portfolios.
Originally published at http://khanfk.substack.com.
