The trust for Bitcoin at Grayscale is on the way to surpass the largest gold ETF. The growth of Bitcoin has been fuelled by the increased adoption of digital assets.
A Bloomberg senior commodity analyst, Mike McGlone, has forecasted that the Bitcoin Trust on Grayscale will surpass the biggest gold-tracking ETF in the coming months. One of the reasons behind this growth will be the increased rate at which individuals and institutions invest in digital assets.
The rise of Grayscale Bitcoin Trust
In a tweet published by Mike McGlone, he compared the growth trends of Bitcoin trusts and gold funds. The analysis was conducted of data collected in the past year and the financial projections after a few months.
#Bitcoin Trust on Track to Surpass World's Largest #Commodity ETF –
In a world going digital, we believe #gold symbolizes the diminishing potential for sustained commodity-price advances, notably vs. Bitcoin. The crypto is a prime example of how advancing innovation suppresses pic.twitter.com/3Q3FgiURSs
— Mike McGlone (@mikemcglone11) April 14, 2021
SPDR Gold Shares is the largest Gold exchange-traded fund in the world. The total assets under management at this firm surpass $57 billion. On the other hand, Grayscale launched just eight years ago, and their trust is growing at a high rate.
By mid-2020, the assets under management at SPDR Gold Shares (GLD) were more than $80 billion. At this time, Grayscale had less than $5 billion worth of Bitcoin in their trust. However, in 2021, the total assets under management at SPDR seemed to decline at an alarming rate while Grayscale’s BTC trust gained. The firm has lost more than $20 billion worth of gold assets, with some investors believing that Bitcoin took away the massive gold market share.
If the projections provided by Bloomberg’s commodity analyst are anything to go by, it means that the Grayscale Bitcoin Trust will exceed SPDR’s gold market share soon.
Increased adoption of digital assets
The assets under management for both Bitcoin and Gold have shifted because of digitalization on financial markets. Bitcoin’s price has risen by more than 500% from the last quarter of 2020. As the most popular cryptocurrency, many firms, and individuals are now accepting it as a means of payment.
With more institutional adoption of Bitcoin being expected soon, it is clear that the Bitcoin being held at Grayscale’s trust will also increase. The price of gold has also risen by 17% since October 2020, and this slight jump is much lower for investors who want to reap huge returns of crypto trading.
According to McGlone, the rise of Bitcoin’s trust shows that the world has shifted to a digitalized market space. On the other hand, the decline of Bitcoin shows little potential for commodity prices to rise.