Gold ETF success shows the BTC price boom hasn’t even started, as the SEC approves first Bitcoin ETF in the US

Bitcoin ETF Gold SEC
“bitcoin” by stevegarfield is licensed under CC BY 2.0

Key Gold Takeaways:

  • Gold ETFs (exchange-traded funds) had a significant influence on the price of the safe haven asset.
  • Investors consider both Bitcoin and gold to be hedges against rising market instability.
  • First ever Bitcoin-linked ETF launching will launch on Oct 19 on New York Stock Exchange.

YEREVAN (CoinChapter.com) – After the approval of the first US-based Bitcoin ETF, the cryptocurrency could further surge in price, following the example of gold, which has seen a significant uptrend since its first ETF launch in 2003.

In hindsight, gold historically was and still remains a safe haven for investors wishing to hedge against inflation, market instability, and political turbulence. Aside from buying the asset directly, traders and investors can purchase the precious metal on gold ETFs.

The ETF investment system gives traders exposure to a particular asset market without the necessity to purchase, store and resell it. Brien Lundin, the editor of precious metals and mining advisory Gold Newsletter, commented on gold ETFs’ impact on the asset’s popularity.

“Over the long term, the ETFs are putting the world’s gold into the hands of the investing public. They are in effect, democratizing the management, and mismanagement, of the world’s money supplies.”

asserted the editor.

The AUM (assets under management) of gold ETFs has had its ups and downs but pushed $200 billion over a year ago. Meanwhile, the precious metal’s spot market price has grown roughly 400% since the first gold ETF launch in 2003. The value for 1 oz stood at $1,766 in the New York session Monday.

Interest in gold ETFs is n the rise. Source: Katusa Research.
Interest in gold ETFs is n the rise. Source: Katusa Research.

Also read: Bitcoin boomed better as an inflation hedge than real estate and gold: Pomp

What does it mean for Bitcoin?

Dubbed “digital gold,” Bitcoin has also become a hedge against inflation and market turbulence. One could have applied the earlier mentioned comment from the editor of Gold Newsletter to Bitcoin as well as gold. “Democratizing the management of money” was the alleged purpose of creating the cryptocurrency in the first place.

Yet, while Canada has already approved its first Bitcoin ETF in Feb 2021, the US Securities and Exchange Commission (SEC) did not hurry to follow suit.

The SEC chairman Gary Gensler got multiple requests to review and declared he was not opposed to the idea. Accordingly, the agency compiled a review schedule, presented below.

Bitcoin ETFs' potential approval dates. Source: Bloomberg
Bitcoin ETFs’ potential approval dates. Source: Bloomberg

Exchange-traded products provider ProShares got the approval on Oct 18 and put Bitcoin ETFs on the US map. ProShares CEO Michael L. Sapir commented on the breakthrough, saying that Bitcoin ETFs will significantly shape the future of BTC trading.

We believe a multitude of investors has been eagerly awaiting the launch of a bitcoin-linked ETF after years of efforts to launch one. BITO will open up exposure to bitcoin to a large segment of investors who […] are comfortable buying stocks and ETFs, but […] are concerned that [cryptocurrency] providers may be unregulated and subject to security risks.

asserted the executive.

Should investors expect a surge in price from Bitcoin? The flagship cryptocurrency value is already flirting with its all-time high of $64,895. If digital gold takes cues from its predecessor, BTC could expect a significant surge in the upcoming cycles. The gold value surged by 400% after the first ETF launch. If Bitcoin follows the same pattern, its price could hit $244.000 by the year 2038.

The BTC/USD exchange rate stood at $61,584 at press time.

Bitcoin could explode to 244K after ETF approval. Source: BTCUSD on TradingView.com
Bitcoin could explode to 244K after ETF approval. Source: BTCUSD on TradingView.com

Also read: Bitcoin breaks above $59K for the first time since May on BTC ETF FOMO

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