In just over a month since its approval According to the US Securities and Exchange Commission (SEC), bitcoin ETFs have rapidly gained ground in the market, posing a formidable challenge to the long-standing dominance of gold ETFs.
bitcoin ETFs Gain Ground Against Gold ETFs
The rapid rise of bitcoin ETFs has led to a convergence in asset values, and btc ETFs close the gap with gold ETF. bitcoin ETFs hold approximately $37 billion in assets after just 25 days of trading, while gold ETFs have accumulated $93 billion in more than 20 years of trading.
In this regard, Bloomberg Senior Commodities Strategist Mike McGlone emphasizes the changing landscape and states: “Tangible gold is losing its shine to intangible bitcoin.”
According For McGlone, the continued resilience of the US stock market, the strength of the US currency and 5% interest rates have presented headwinds for gold. Furthermore, as the world increasingly embraces digitalization, the emergence of bitcoin ETFs in the United States adds more competition to the precious metal.
McGlone further states that while the bias towards gold prices remains bullish, investors who focus solely on gold may risk being left behind in potential paradigm shifts. digitization trends.
Ultimately, McGlone suggests that investors should consider diversifying their portfolios by incorporating bitcoin or other digital assets to stay ahead in the changing investment landscape.
bitcoin Rally Driven by Institutional Demand
The success of bitcoin ETFs is further demonstrated by recent data suggesting that the upward trend in bitcoin prices is primarily driven by institutional demand. At the same time, retail participation appears to be declining.
According According to analyst Ali Martinez, as the price of bitcoin continues to fluctuate between $51,800 and $52,100, there has been a notable decrease in the creation of new bitcoin addresses on a daily basis, indicating a lack of retail participation in the current bullish rally and highlighting the growing influence of institutional investors in the cryptocurrency market.
However, the crypto market expert Con Point out a significant change in the positions of long-term bitcoin holders, indicating a possible downward movement.
As seen in the chart below shared by crypto Con, the reversal line crossed below -50.00 for the first time in over a year, a pattern that has historically occurred at critical times in bitcoin's history. . market cycles. These moments include the bottom of the cycle, the middle top (which occurred only once), and the start/end of a top parabola of the cycle (which occurred most frequently).
According to crypto Con, this recent change in long-term holders' positions raises two possible scenarios: a medium or imminent parabolic move. Such a move at this stage of the cycle is considered unusual.
Primarily, it indicates that long-term bitcoin holders are exiting their positions in significant amounts, possibly in anticipation of a market. correction or a change in the general trend.
Overall, the change in bitcoin holders' positions and the decline in retail participation present contrasting dynamics in the current market landscape. While institutional demand continues to drive up the price of bitcoin, long-term holders appear to be taking profits or adjusting their positions.
While btc is currently trading at $51,800, it remains to be seen what the direction of the next move will be and how institutions will continue to influence the price action of the largest cryptocurrency as spot bitcoin ETFs gain traction.
Featured image from Shutterstock, chart from TradingView.com
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