Analyst: Bitcoin will become the main store of value

A significant influx of capital into exchange-traded Bitcoin products in the long term threatens the status of gold as a primary store of value, the expert admitted. Writes about this The Block.

Head of Research at ETC Group Andre Dragos drew attention to the growing divergence between flows associated with crypto funds and gold.

The analyst added that the vast majority of new cryptocurrency investments are believed to be in US-listed exchange-traded funds.

According to ETC Group, net inflows into ETP based on cryptocurrency since the beginning of the year increased significantly in February. The trend is partly due to a slowdown in capital withdrawals from the Grayscale Bitcoin Trust ETF. Against this background, there is an outflow of funds from gold.

According to BitMEX Research, over the past week the total value of spot Bitcoin exchange-traded funds in the United States increased by $2.3 billion. The bulk of the inflow was provided by BlackRock's iShares Bitcoin ETF.

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— BitMEX Research (@BitMEXResearch) February 17, 2024

Ryze Labs analysts also noted that since the beginning of the year, investors have withdrawn $2.4 billion from the 14 largest gold-based ETFs, while Bitcoin products have recorded an inflow of $3.89 billion.

Dragos expects the trend to continue in the long term and “eventually Bitcoin will undermine gold's position as a primary store of value.”

However, he emphasized that the current capitalization of gold ETPs is approximately three times higher than the combined value of similar cryptocurrency products.

Over the past 30 days, the leading digital currency has risen in price by 25% (CoinGecko). The asset is trading at levels near $52,000.