There is a lot more attention on bitcoin now that it is so close to challenging the $100,000 price barrier. There is a reason to say that the $100K price barrier may not even matter at all, well beyond the fact that there are no guarantees and assurances that the price has to rise. It is becoming impossible to ignore that the capital inflow and interest in bitcoin and other cryptocurrencies has obliterated the same type of interest in gold.
Oggonomics has been tracking ETFs and related vehicles owning bitcoin and crypto and the inflows are absolutely crushing the interest in gold! The world’s top gold ETF is now 20 years old and the world’s largest bitcoin ETF has been traded for less than a year!
There are many sources to track ETFs as a group. The ETF Database is one of them. Assets under management can always have some slight discrepancies as some ETF websites do not always update their holdings, prices and other data at the exact same time. This still provides keen insight as a general rule of thumb for investors of all types.
TOP GOLD ETFs vs. TOP CRYPTO ETFs
The top ten gold ETFs tracked in the ETF Database have close to $125 billion in combined assets under management. This is, of course, dominated by the SPDR Gold Shares (NYSEArca: GLD) with over $74 billion in assets and the iShares Gold Trust (NYSEArca: IAU) with over $33 billion in assets. The SSGA (SPDR) site shows more than $74.5 billion in assets and the iShares site shows over $33.4 billion in total assets.
The top ten cryptocurrency ETFs tracked in the ETF Database have more than $102 billion in combined assets under management. This is dominated by more than $45 billion in the iShares Bitcoin Trust ETF (NASDAQ: IBIT) and the $19.6 billion listed in the Grayscale Bitcoin Trust ETF (NYSEArca: GBTC). The iShares website shows its assets at more than $48 billion now, and the Grayscale site shows this as $20.99 billion.
Regardless of which site you use, and also not even considering the 20-year to 1-year comparison, this already puts the ETF interest of bitcoin and crypto at 80% of the interest in gold. It is even more skewed if you begin to include the other related issuers.
MANY ETFs AND HOLDERS ARE NOT INCLUDED
Oggonomics would also recommend that investors look closely at the ETFs named in each of those baskets. Many gold-related and crypto-related issuers are not represented at all in the list. This only shows that the interest in the rise of bitcoin is even that much more impressive. Gold-backed ETFs also do not include the gold-mining ETFs which are also holding billions of dollars in assets under management.
The ProShares Bitcoin ETF (NYSEArca: BITO) tracks Bitcoin futures contracts rather than the actual spot price of bitcoin, and its $2.6 billion in total assets by market value are not counted in the ETF Database. And because of cash and futures holdings, the BITO total return may be more difficult to calculate over time as it has paid over $10.00 per share in dividend distributions from April to November (2024) alone.
MicroStrategy Inc. (NASDAQ: MSTR) is not included in the Bitcoin ETFs and if you include this today it would tilt the total ETF and crypto-backed market values over the value of gold-backed owners. Tracking its market cap can be tricky because it keeps issuing new shares to turn around and immediately purchase more bitcoin. Its actual market capitalization was north of $100 billion briefly, but the last update (11/11/2024) on its formal bitcoin holdings before including two more rounds of bitcoin purchases after stock and convertible debt sales was as follows:
Approximately 279,420 bitcoins with an aggregate purchase price of approximately $11.9 billion and an average purchase price of approximately $42,692 per bitcoin.
There are also many smaller companies which are mini-versions of MicroStrategy and a whole host of public stocks of bitcoin miners and exchanges. Coinbase Global, Inc. (NASDAQ: COIN) is the top crypto-dedicated trading platform. Even as of September 30, 2024, long before the election results, it had $273 billion in safeguarded assets and had $185 billion in quarterly volume traded in crypto. Finviz lists Coinbase’s market cap as $70.5 billion.
The VanEck Gold Miners ETF (NYSEArca: GDX) is also missing from the gold-backed ETFs as it tracks the top gold mining corporations made up from the NYSE Arca Gold Miners Index rather than the price of gold. It counts nearly $14 billion in assets under management at the present time and it has traded since 2006. With 64 stocks in its holdings, the top 5 gold miners account for about 43% of its total holdings.
The VanEck Junior Gold Miners ETF (NYSEArca: GDXJ) is also not included in the gold-backed ETFs. It has $5 billion in assets and tracks the MVIS Global Junior Gold Miners Index. This ETF is shown to have 89 holdings, and its top 5 account for over 31% of its total assets.
DISCLAIMER
Oggonomics does not issue formal price targets or formal ratings on gold, bitcoin or any of the companies and entities mentioned herein. This report is not a recommendation to buy or sell any of the assets and asset classes named. All decisions to buy or sell are the responsibility of each investor individually and those decisions should be made with a financial advisor.
