Gold has become one of the world's leading assets and most investors view it as one of the largest stores of value. However, this was not always the case.
One of the major turning points for the yellow metal was 2003, when the first gold ETF was launched in Australia. Over the next decade, gold would solidify its position as one of the world's leading assets. Will Bitcoin follow a similar path once an ETF is launched in the US?
The leap in quality of gold
The first gold ETF was Gold Bullion Securities, launched on March 28, 2003 on the Australian Stock Exchange. In the next few years, the investment product would become quite popular, finally making its way to the United States a year later. State Street, the second oldest US bank in the world, launched its gold ETF in 2004. In its first three days of trading, it had exceeded $ XNUMX billion in assets. Since then, gold ETFs have become one of the staple investment products.
Will the same happen with Bitcoin once the first ETF launches in the US market? Cryptocurrency influencer and trader Lark Davis thinks so. He recently turned to Twitter to advertise the power of an ETF, predicting that Bitcoin will enter the mainstream scene when an ETF launches, just like it did with gold.
Prior to the launch of the first ETF, gold was trading at $ 332 an ounce. Over the next decade, it jumped to $ 1.600 an ounce.
The magic of an ETF
The first Bitcoin ETF in the US market was launched in Canada just over a month ago. A product of Purpose Investments Inc. The ETF quickly garnered investor interest, recording $ 80 million in the first hour of trading alone. The ETF has since surpassed $ XNUMX billion, demonstrating high investor interest.
But why does an ETF garner such high interest? Peter Grandich, a Wall Street veteran, explained why the gold ETF was such a success, stating that: “Gold ETFs have been successful because not only have they brought new investors into the gold market that otherwise they may not have allocated funds in this sector, but also because they have increased demand in the physical market ”.
In fact, the demand for physical gold increased once it was launched on the ETF market for the product. For Bitcoin, such a high demand would be a godsend. We've already seen what strong demand can do on the quotation of the price. One of the main catalysts has been BTC's institutional interest in the current bull run, with Wall Street devouring the cryptocurrency for billions of dollars. This created more demand and eventually the price reacted.
ETFs make it easier to invest in an asset, even with no previous experience. When gold ETFs were born, they attracted millions of novice investors around the world who had always wanted to invest in the asset.