Is The Bitcoin ETF (BITO) The New GLD?

The SEC accepted the brand new bitcoin ETF on Friday. It began buying and selling at this time below the ticker BITO.  

Whether or not you consider bitcoin will finally survive authorities regulation or not, the introduction of an ETF that tracks bitcoin futures, creates entry for a brand new viewers. For institutional buyers, now they’ll allocate to bitcoin, inside their mandate. And it permits particular person buyers who could have by no means participated in bitcoin, to purchase it of their regular brokerage account.  

With that, there are attention-grabbing similarities to the 2004 launch of the primary gold ETF (GLD)

GLD
. GLD provided a brand new and simple method for conventional long-only institutional buyers, in addition to people, to allocate to gold. And with that, gold costs took off. Gold was low $400s on the time, and by no means regarded again.  The worth of spot gold rose virtually five-fold over the next seven years.

So, this bitcoin ETF ought to profit equally from these new flows. However there could also be extra to this GLD comparability. Many view bitcoin as the brand new gold — as a retailer of worth and hedge towards inflation. With that, within the face of the most well liked inflation we have seen in a long time, we are going to see if cash strikes out of GLD, to fund new investments in BITO.

It is early, however to date we are able to see some divergence within the charts that recommend that, not less than, speculators are taking bets that this “swap” (GLD for BITO) could occur. 

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