In just over a month since their approval Bitcoin ETFs have rapidly gained market traction, posing a formidable challenge to the long-standing dominance of gold ETFs, according to the U.S. Securities and Exchange Commission (SEC).
Bitcoin ETFs gain ground on gold ETFs
The rapid rise of Bitcoin ETFs has led to a convergence of asset values, with BTC ETFs bridging the gap with Gold ETF. Bitcoin ETFs hold approximately $37 billion in assets after just 25 trading days, while gold ETFs have accumulated $93 billion in over 20 years of trading.
In this regard, Mike McGlone, senior commodities strategist at Bloomberg, highlights the changing landscape, stating: “Tangible gold is losing its luster to intangible Bitcoin.”
According to For McGlone, the continued resilience of the US stock market, the strength of the US currency and 5% interest rates have been obstacles for gold. Additionally, as the world increasingly embraces digitalization, the emergence of Bitcoin ETFs in the United States adds even more competition to the precious metal.
McGlone further states that while the trend in gold prices remains upward, investors who focus solely on gold risk falling behind a potential paradigm shift. digitization tendencies.
Ultimately, McGlone suggests that investors should consider diversifying their portfolios by incorporating Bitcoin or other digital assets to stay ahead of an evolving investment landscape.
Bitcoin Rally Driven by Institutional Demand
The success of Bitcoin ETFs is also demonstrated by recent data suggesting that the upward trend in Bitcoin prices is primarily driven by institutional demand. At the same time, retailer participation appears to be declining.
According to According to analyst Ali Martinez, as the price of Bitcoin continues to hover between $51,800 and $52,100, there has been a notable decrease in the daily creation of new Bitcoin addresses, indicating a lack of retail participation in the rally current bullish trend and highlighting the growing influence of institutional investors on the cryptocurrency market.
However, market expert Crypto Con points out a significant change in the positions of long-term Bitcoin holders, signaling a potential downward move.
As seen in the chart below shared by Crypto Con, the position change line has fallen below -50.00 for the first time in over a year, a trend that has historically occurred at times Bitcoin reviews. market cycles. These times include the bottom of the cycle, the middle of the top (which only occurred once), and the beginning/end of an upper cycle parabola (which occurred most frequently).
According to Crypto Con, this recent change in long-term holders' positions raises two possible scenarios: a mid-high move or an impending parabolic move. Such a move at this point in the cycle is considered unusual.
This primarily indicates that long-term Bitcoin holders are abandoning their positions in significant numbers, perhaps anticipating a market. correction or a change in the general trend.
Overall, the changing position of Bitcoin holders and the decline in retail participation present contrasting dynamics in the current market landscape. As institutional demand continues to drive the price of Bitcoin higher, long-term holders appear to be taking profits or adjusting their positions.
With BTC currently trading at $51,800, it remains to be seen what direction the next move will be and how institutions will continue to influence the price action of the largest cryptocurrency as Bitcoin ETFs spot are gaining ground.
Featured image from Shutterstock, chart from TradingView.com
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