- Gold’s pain “is like the cherry on top for Bitcoin fans,” Balchunas says, amid euphoria following BTC ETF launches.
- Bitcoin price has nicked $53,000, a level last tested on December 3, 2021.
- Almost $100 million in shorts have been liquidated in the process alongside nearly $12 million in long positions.
In a landmark decision on January 10, the US Securities & Exchange Commission (SEC) approved multiple spot Bitcoin exchange-traded funds (ETFs) in a single go. Almost seven weeks down the line, the theme continues to drive the cryptocurrency market, giving investors the train to ride on as markets prepare for the BTC halving in 52 days.
Also Read: Bitcoin price's next move should manifest once MicroStrategy grows BTC portfolio to 193K tokens
Bitcoin ETF AUM to surpass Gold
Eric Balchunas, an ETF specialist with Bloomberg Intelligence, says that there is a decent chance that the assets under management (AUM) for Bitcoin ETFs could surpass those of Gold ETFs in less than two years.
Gold's Pain is Bitcoin ETFs' Gain in Store of Value Smackdown.. new from me on how gold being in the gutter is like the cherry on top for bitcoin fans who just got to witness the biggest ETF launch ever. Decent chance bitcoin ETFs pass gold ETFs in aum in less than 2yrs w… pic.twitter.com/rXJra1dyhF
— Eric Balchunas (@EricBalchunas) February 26, 2024
This supposition draws from the current lull in the Gold ETF market. According to Balchunas, declines in the price and interest in Gold ETFs is what has come as markets lean toward BTC ETFs. In his opinion, we now have a battle for assets between the two investment products.
It becomes even sweeter as BTC ETFs have managed to amass over $8 billion, according to Balchunas, adding that “[BTC ETFs now command] 40% as much in assets and could surpass Gold in under 24 months.”
JUST IN: #Bitcoin is demonetising Gold ETFs as the 'Store of Value' narratives takes hold.
— Bitcoin Archive (@BTC_Archive) February 26, 2024
Bitcoin ETFs are taking in billions, while Gold ETFs are bleeding assets.
Bloomberg's @EricBalchunas pic.twitter.com/k4SuvcTN22
Evaluating how Bitcoin ETFs continue to haul in cash as investors bail on Gold, Balchunas details that as BTC ETFs took in about $5 billion in net new assets since they started trading on January 11, Gold ETFs have only managed $3.6 billion in outflows with part of it going to the BTC ETFs.
Balchunas deems Bitcoin ETF class “the most successful launch in history by many measures,” acknowledging that they have added competition for Gold. A response by X user @wschweitzer corroborates this conclusion.
I'm old and before Bitcoin was a buyer of Gold and Silver which I still own. When I discovered $BTC I stopped buying Gold and Silver. I think both can exist in a portfolio.
— Walter Schweitzer (@wschweitzer) February 26, 2024
Almost $100 million in short positions liquidated as Bitcoin price breaches $53,000
Bitcoin price has breached the $54,000 milestone, a level last tested on December 3, 2021. The multi-year high has caught many traders off guard as analysts anticipate a correction before the next leg up.
BTC/USDT 1-day chart
Data shows that there are many stop losses around $52,000, which is likely to trigger a foray north in Bitcoin price as shorts close their positions.
#BTC Liquidation Update
— Dieguito - Charts (@DieguitoCharts) February 26, 2024
52k's are full of stops, which can be fuel for higher
I am still LONG from low 50k's, and holding spot position on altcoins also ✅ pic.twitter.com/dTS3Fc2KdM
Nevertheless, with the foray past $54,000, $96.36 million in short positions have been liquidated alongside $11.5 million longs.
BTC liquidations chart
At the time of writing, Bitcoin price is trading at $54,382 as of 21:00 GMT.
Open Interest, funding rate FAQs
How does Open Interest affect cryptocurrency prices?
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
How does Funding rate affect cryptocurrency prices?
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto analyst says Bitcoin bottom is very close, another correction in BTC likely
Bitcoin is trading above $67,000 on Sunday after securing support at $65,000. While BTC holds its gains steady, analysts evaluate the price trend of the largest asset by market capitalization and predict a deeper correction in Bitcoin.
AI tokens could really ahead of Nvidia earnings
Amidst other narratives, AI tokens could gather momentum with the upcoming earnings result of NVIDIA next week. The $2.3 trillion company’s stock emerged as a poster child for the crypto AI sector and gains in the stock catalyzed a rally in cryptocurrency tokens.
Whale rotates capital from WIF to TREMP and BONK, Solana meme coins make comeback
Lookonchain identified a large wallet investor who rotated capital from Solana based meme coin Dogwifhat to Doland Tremp and Bonk. The two meme coins have added double-digit value to their prices in the past 24 hours, as seen on CoinGecko.
Crypto political donations surge to $94 million pre election, exceed previous elections by 13%
Crypto industry giants supported political campaigns in the US looking for pro-crypto governance in the US. A Bloomberg report from May 17 shows that crypto donors have spent $94 million in an effort to get pro-crypto regulation in the US.
Bitcoin: Is BTC out of the woods? Premium
Bitcoin (BTC) price action in the past two days has confirmed the resumption of the bull run. However, BTC needs to clear a few key hurdles before investors can go all-in.