Bitcoin (BTC) is cementing its position as a dominant financial asset, outperforming gold and the NASDAQ, while also achieving significant milestones through exchange-traded funds (ETFs). With institutional interest at an all-time high and economic conditions ripe for another potential bull run, Bitcoin is poised to reshape the investment landscape.
Bitcoin Outshines Gold and NASDAQ
As 2024 unfolds, Bitcoin continues to outperform traditional assets. Year-to-date, Bitcoin has surged more than 52%, while gold has gained over 30%, and the NASDAQ has risen by 24.43%. Analysts point out that Bitcoin thrives during periods of monetary expansion—a trend that has reappeared amid growing economic challenges.
Insights from Ecoinometrics underscore Bitcoin’s ability to act as a hedge against inflation and currency devaluation, especially during times of fiat debasement. A similar pattern emerged in 2020, when governments injected massive liquidity into global markets to counter the COVID-19 pandemic’s economic impact. During that period, Bitcoin achieved a compound annual growth rate (CAGR) of nearly 150%, far surpassing the NASDAQ’s sub-50% growth and gold’s modest performance.
While the current economic environment lacks the aggressive monetary policies seen in 2020, rising fiscal deficits and national debts could force central banks to inject liquidity once again. If such conditions materialize, Bitcoin is expected to outperform traditional assets, repeating its historic trend.
The upcoming U.S. presidential election adds further intrigue to Bitcoin’s outlook. Research by Bernstein suggests that if Donald Trump wins the election, Bitcoin could surpass its all-time high of $73,949, driven by Trump’s pro-digital asset stance. Standard Chartered predicts Bitcoin could reach $150,000 if Trump secures victory, and even without election-related catalysts, the bank forecasts a $200,000 price target by 2025.
Bitcoin ETFs Set Record-Breaking Pace
Bitcoin’s growth is not only reflected in price gains but also in the success of Bitcoin ETFs. Within just ten months, Bitcoin ETFs in the U.S. have surpassed $20 billion in net inflows, a milestone that took gold ETFs five years to achieve. Institutional interest has played a pivotal role in driving these inflows.
On October 17, the ETF market reached a new high, with Bitcoin spot ETFs recording over $1.8 billion in weekly inflows as Bitcoin’s price surged 10%, crossing $68,000. BlackRock’s iShares Bitcoin Trust (IBIT) leads the charge, reporting inflows of $22.7 billion. ARK 21Shares, Grayscale’s GBTC, and Fidelity’s FBTC also reported significant capital influx, reflecting the growing investor confidence in Bitcoin ETFs.
The total assets under management (AUM) for Bitcoin ETFs have now crossed the $65 billion threshold, with more than 950,000 BTC under management. Bloomberg ETF analyst Eric Balchunas highlighted that Bitcoin ETFs reached the $20 billion inflow mark in less than a year—demonstrating Bitcoin’s superior market momentum compared to gold ETFs, which took five years to achieve the same result.
Even financial giants like Morgan Stanley are jumping on the Bitcoin bandwagon, with the firm’s holdings in Bitcoin ETFs amounting to $272 million. This strategic move follows the bank’s decision to allow financial advisors to offer Bitcoin ETF investments to eligible clients.
A Bullish Future on the Horizon?
With Bitcoin’s ETFs flourishing and macroeconomic conditions hinting at future liquidity injections, the cryptocurrency stands at the forefront of financial innovation. As global markets brace for potential fiscal turbulence, Bitcoin’s ability to hedge against inflation, outperform traditional markets, and attract institutional investors could spark another major rally.
Bitcoin’s combination of robust ETF inflows and strong historical performance under monetary expansion signals that it may leave gold and the NASDAQ even further behind, setting new records in the coming years. Whether driven by policy changes, institutional interest, or macroeconomic shifts, Bitcoin’s future trajectory promises to redefine the financial landscape.
