BTC ETFs Poised to Follow Gold's Turbulent Path to New Heights

Bloomberg analyst Eric Balchunas predicts that U.S. Spot BTC ETFs will eventually surge to a new record high, following in the footsteps of gold ETFs' 'triumph and pain' pattern.

Gold ETFs briefly became the world's largest ETF in 2011 but spent eight years trying to reclaim the top spot before doing so again in 2024. Balchunas suggests that a similar pattern could happen for BTC, with spectacular gains followed by painful drawdowns and recoveries that may test investors' patience.

The spot Bitcoin price has dropped by nearly half from over $126K to $64K, but only 10% of spot BTC ETF holders are left compared to a third of gold ETF investors. Balchunas highlighted that despite this, long-term holder (LTH) supply remains intact, with a 30-day net position staying positive even as ETFs shed nearly $4bn in June.

However, rising oil prices above $80 have coincided with Bitcoin's sideways structure below $65K, signalling that energy market shocks could still derail the crypto's upside. It is unclear whether BTC will attract more capital and behave like a hedge if the West Asia crisis escalations extend into Q3.