The iShares Bitcoin Trust (IBIT) has had a strong performance in the past two months. In addition to its stock soaring to an all-time high of $41.2, the fund has added billions in assets. It has over $14 billion in assets, making it the second-biggest Bitcoin ETF after the Grayscale Bitcoin Trust (GBTC).
IBIT and GLD ETF
There is a likelihood that the IBIT ETF will pass the SPDR Gold Shares ETF (GLD) in terms of assets in the coming years. GLD, which was launched in 2004, has accumulated over $58 billion in assets. The Invesco Physical Gold ETC (SGLD) has accumulated over $17 billion in assets over time. Similarly, the iShares Physical Gold (SGLN) has over $14 billion.
There are a few reasons why spot Bitcoin ETFs will likely pass assets in gold in the long term. First, there is the supply and demand element. Gold demand is rising from global central banks like those in China and Russia. However, the demand growth is not all that fast.
Bitcoin, on the other hand, is seeing strong demand from both retail and institutional investors. Most experts believe that many institutional investors will allocate a small amount of their cash to these Bitcoin ETFs.
For one, Blackrock, the biggest asset manager in the world, has invested directly in Bitcoin through the IBIT ETF. The same is true with Fidelity and Franklin Templeton. Other large asset managers like State Street, Morgan Stanley, and Capital Group will likely allocate some of their cash to Bitcoin.
Hedge funds will also seek exposure to Bitcoin, an asset that has done better than stocks over time. Bill Ackman, one of the most prominent hedge fund managers, is considering investing in Bitcoin and others may follow.
Most of the Bitcoin’s gains in the past 15 years came from retail investors. The next phase of this growth will come from a combination of retail and institutional investors.
Bitcoin supply is waning
Meanwhile, the supply element of Bitcoin is also encouraging. There will only be 21 million Bitcoins ever. Of these, 19.65 million coins have already been mined. This means that miners are now working to produce just 1.35 million coins. It is estimated that over 6 million coins have been lost forever.
At the same time, Bitcoin mining difficulty is rising and the situation will get more complicated after the upcoming halving. The number of Bitcoins mined every day will drop to about 400, which is not enough to fill the soaring demand. And as shown below, the number of Bitcoins in exchanges has continued falling.
Therefore, the outlook is that Bitcoin will likely continue rising now that it has proven itself in the past 15 years. Standard Chartered analysts expect that Bitcoin price will rise to $100k while Anthony Scaramucci believes that it will surge to $150k. Other analysts expect it to rise to over $300k.
If this happens, it means that the iShares Bitcoin Trust (IBIT) will pass the SPDR Gold Shares ETF in terms of assets in the next few years. Besides, most investors believe that Bitcoin is the new era version of gold.
