The Surge In Bitcoin ETFs And Its Potential Impact On Gold

Bitcoin and gold were both top of mind at this past week’s 2024 Investment U Conference in Ojai, California, which I had the privilege of presenting at. There was a rumor circulating that the Bitcoin price rally was sparked by a large financial institution recommending a 2% to 3% weighting to some of its high-net-worth clients. I can’t confirm this, but it’s being reported that Bank of America and Wells Fargo are now offering the Bitcoin ETFs to certain wealth management clients, joining Charles Schwab, Robinhood and others.

The price of Bitcoin pumped more than 45% last month, with around half of those gains recorded in the final week, as demand for the long-awaited spot Bitcoin ETFs hit a fever pitch. Combined daily trading volume for the 10 ETFs was a jaw-dropping $7.7 billion on Wednesday alone, fueled by institutional speculation and leveraged bets that pushed the price of the underlying asset to a near-record high.

trading volume

Remarkably, as of February 29, the combined value of the holdings in U.S.-based Bitcoin ETFs was roughly half the value of all known gold ETFs. The Bitcoin ETFs, which began trading in January, held $43.2 billion, while gold ETFs held $92.3 billion.