Institutional speculation has officially arrived for Bitcoin (BTC) as the latest statistics for the listed spot BTC exchange-traded funds (ETFs) show that flows have been ramping up this week, with the total average daily volume surpassing $2 billion.
BlackRock’s iShares Bitcoin Trust (IBIT) continues to be the most preferred Bitcoin investment vehicle among investors, setting and then breaking its own trading volume record each day this week. According to BitMEX Research, IBIT recorded inflows of $520 million on Tuesday, accounting for the vast majority of inflows for the day, which totaled $576.8 million.
The Fidelity Wise Origin Bitcoin Fund (FBTC) came in second with inflows of $126 million, while Grayscale recorded outflows of $125.6 million, decreasing the net inflows.
Data provided by Farside shows that, in total, the nine new ETFs have recorded inflows of $6.73 billion since launching, with IBIT accounting for $6.54 billion of the total.
“Another intense volume day for the Nine with well over $2b traded,” tweeted Bloomberg Intelligence Senior ETF Analyst Eric Balchunas. “$IBIT broke its personal record again w/ $1.3b (for context, that's more than most large-cap US stocks trade).”
Balchunas said it's also interesting that “$IBIT saw over 100,000 individual trades” on Tuesday. “It was doing 30-60k the whole time up until Tuesday. It's like it found a new gear over [Presidents Day Weekend]. I thought maybe it was just pent-up volume due to the long weekend, but it did even more today, so there goes that theory.”
Tuesday was the second day in a row that the nine new ETFs (“the nine”) topped $2 billion in daily volume since their launch on Jan. 11. On Monday, trading volumes for the funds, excluding GBTC, surpassed $2.4 billion, beating the $2.2 billion record set on their first day of trading.
In BTC terms, “the nine” have accumulated 317,800 Bitcoin, worth approximately $19 billion, in just 32 trading days, according to HODL15Capital.
The consistently heavy inflows, which appear to be on the rise, have ramped up the comparisons between Bitcoin and gold, with analysts now speculating about how long it will take for the total assets under management (TAM) for BTC ETFs to surpass the TAM for gold ETFs.
“Gold's Pain is Bitcoin ETFs' Gain in Store of Value Smackdown… new from me on how gold being in the gutter is like the cherry on top for Bitcoin fans who just got to witness the biggest ETF launch ever,” Balchunas tweeted on Monday. “Decent chance Bitcoin ETFs pass gold ETFs in aum in less than 2yrs.”
This sentiment was reiterated by Hunter Horsley, CEO of Bitwise Invest, following Bitcoin’s breakout performance on Wednesday.
“Bitcoin is going to eat into gold's TAM faster than people expect,” Horsley tweeted. “$250k Bitcoin could happen much sooner than most who've followed the space for years would imagine. Why? For 15 years, Bitcoin proved its merits but was only accessible to some. Bitcoin ETFs were Bitcoin's IPO moment. It's now available to any investor with the click of a button. The market has 10xed.”
In a follow-up post, Horsley said that with the awareness of Bitcoin now picking up after being around for 15 years, “It's going to accelerate now, not slow down.”
“With Bitcoin ETFs, the entire tonnage of US capital markets can easily invest for the first time. The market has grown massively,” he said. “There are no new features to wait for. Price discovery is underway. It can move quickly.”
Balchunas backed up Horsley’s statements, tweeting, “Can't overstate how easy, cheap, standardized ETFs make stuff, in this case, the fact [that] they [are] ‘regulated’ is cherry on top.”
Jurrien Timmer, Director of Global Macro at Fidelity, provided several threads on X last week, delving deeper into the gold v. Bitcoin debate.
“If we compare the outstanding supply of gold and Bitcoin to their annual incremental supply, we get the so-called stock-to-flow (S2F) model. The S2F model measures the number of years it would take to replace the existing stock,” Timmer tweeted.
“While gold’s S2F has been stable over time (at around 60), the S2F for Bitcoin has been rising exponentially,” he said. “Bitcoin’s future supply curve is coded into its structure (growth rate is cut in half every ~4 years), but we don’t know what gold’s future supply looks like. I’m assuming that gold’s S2F will remain around 58 given its stability (new production avg. 2% of outstanding supply).”
“Interestingly, we’ve arrived at that point in history where Bitcoin’s S2F is surpassing gold’s S2F,” he noted. “They are both around 57-58 today, but that will quickly change with Bitcoin’s next halving coming up this spring.”
He said, “Based on the original S2F model, Bitcoin would just continue to stair-step higher until it reaches implausibly stratospheric levels, but using gold’s supply dynamic, the model generates price projections that seem much more reasonable, and in line with the various demand models that I have produced in the past.
These factors led Timmer to develop a working hypothesis on Bitcoin’s potential market share vs gold using the value of monetary gold, “which is that share of gold held by central banks and private investors as a monetary asset (as opposed to jewelry or industrial uses),” as a proxy.
“This is an admittedly inexact science, but based on data published by the World Gold Council, I am guessing that the share of monetary gold is around 40% of total above-ground gold,” Timer said. “Based on the calculations outlined in my previous threads, I estimate that Bitcoin will eventually capture around a quarter of the monetary gold market. At 40%, monetary gold is currently worth around $6 trillion, while Bitcoin is worth $1 trillion.”
At the time of writing, Bitcoin is trading near support at $60,320, an increase of 5.85% on the 24-hour chart, after hitting a high of $64,150 shortly after midday.
BTC/USD Chart by TradingView
