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The Grayscale Bitcoin Trust on Track to Surpass the Largest Gold ETF: Bloomberg

GBTC Inflows Vs. GLD Outflows. Source: Bloomberg


The Grayscale Bitcoin Trust is on route to surpass the largest gold-tracking ETF in the following few months, suggested Bloomberg’s senior commodity strategist, Mike McGlone. The analyst also outlined the ongoing digitalization phase as the primary reason behind BTC’s success.

GBTC on its Way to Surpass SPDR Gold Shares

McGlone took it to Twitter to exemplify Bloomberg’s views on the performance of the two largest bitcoin and gold funds in the past year and the projections for the next several months.

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Founded in 2004, SPDR Gold Shares (GLD) is the gold-tracking exchange-traded fund with the most significant AUM with over $57 billion. On the other hand, Grayscale’s Bitcoin Trust saw the light of day about eight years ago.

Bloomberg’s graph clearly shows the difference between the two funds, at least until mid-2020. GLD was riding high with its AUM exceeding $80 billion, while the GBTC was struggling beneath $5 billion.

GBTC Inflows Vs. GLD Outflows. Source: Bloomberg
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GBTC Inflows Vs. GLD Outflows. Source: Bloomberg

However, as institutions opened their minds to bitcoin and started accumulated massive portions, the gap began to close. CryptoPotato reported that Q3 2020 and especially Q4 2020 were highly positive for Grayscale and its leading Trust, whose AUM skyrocketed to about $20 billion.

2021 saw even more similar developments, and the GBTC AUM neared and exceeded $40 billion, according to the company’s latest update. At the same time, GLD’s AUM has been declining somewhat steeply, and over $20 billion have flown out of the leading gold-tracking ETF.

Somewhat expectedly, numerous Bitcoin proponents, and even representatives of the traditional financial scope, such as JPM, have breached the idea that BTC has eaten gold’s market share.

Ultimately, Bloomberg’s projection shows that if the current trends with gold and bitcoin remain the same, GBTC could catch GLD in May 2021 or July 2021.

Price Difference and Digitalization

Apart from the institutional adoption, the AUM for GLD and GBTC changed due to the price developments for both underlying assets as well. While gold’s value has increased by a respectable 17% from October 1st to today, bitcoin’s performance has been significantly better as the primary cryptocurrency has skyrocketed by more than 500% in the same timeframe.

McGlone believes this substantial difference signifies the digitalization of the world, and gold “symbolizes the diminishing potential for sustained commodity-price advances, notably vs. Bitcoin.”

“The crypto is a prime example of how advancing innovation suppresses.” – McGlone concluded.

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