This week, eleven Bitcoin ETFs were approved after months of speculation and waiting, bringing Bitcoin to mainstream institutions for the first time. Since BTC is often considered digital gold due to its limited supply, could the top cryptocurrency by market cap see a similar 360% rally after the launch of the ETF following in the footsteps of SPDR Gold shares – the first gold-backed ETF launched in 2004 ?
Gold rises by 360% after the launch of ETFs
At the moment, it remains unclear whether the Bitcoin ETF approvals are a “news selling event” or a catalyst for further upside. However, given the potential for billions of dollars to flow into these newly launched funds as well as the fact that Bitcoin is the scarcest asset in human history, a price rise seems to be a given eventually.
The best measure of how Bitcoin is performing could come from the precious metal, which Satoshi Nakamoto saw beneficial traits in, such as limited supply. In 2004, the first gold-backed ETF was launched on the New York Stock Exchange: SPDR Gold Shares. In the years that followed, the underlying asset – gold itself – rose more than 360% before reaching its peak.
A 360% rally from BTCUSD’s current levels would push the largest cryptocurrency by market cap to more than $200,000 per coin. However, there is more to this comparison.
Gold after ETF launch versus BTC now | BTCUSD on TradingView.com
Why can Bitcoin break all records?
While SPDR Gold stocks and what’s happening with Bitcoin make for an interesting comparison, the cryptocurrency-focused ETF is actually enjoying more success. Bitcoin Spot ETFs debuted with a trading volume of over $3 billion, making it the most successful ETF launch in history.
Unlike gold, more of which can be mined at any moment, bitcoin has a truly limited supply with a cap of 21 million bitcoins. Even fewer are in circulation, with millions more potentially lost or locked away forever. Furthermore, more than 50% of Bitcoin’s supply has not moved in two years, even during one of the worst bear markets ever, the threat of a recession, the possibility of world war, and more.
All of these factors make Bitcoin particularly ripe for long-term price appreciation – a fact that institutions recognize when considering a cryptocurrency’s risk versus reward profile.
