A chart shared on Twitter shows that the investments of Grayscale Bitcoin Trust are significantly higher than those of gold ETFs.
The Bitcoin curve shows a net growth as of January 2020, almost topping out in October 2020, coinciding with the high Bitcoin price growth.
The gold investment curve also shows a growth, but much lower. He writes about this in the JP Morgan report:
“What makes the October trajectory of the Grayscale Bitcoin Trust even more impressive is its contrast to the trajectory of the gold ETFs, which after all has seen a modest outflow since mid-October. This contrast supports the idea that some investors who previously invested in gold ETFs are now looking to Bitcoin as an alternative to gold.
And it goes on:
“The potential long-term benefit for bitcoin is considerable if it competes more intensively with gold as an “alternative” currency, as the market capitalization of bitcoin is expected to increase 10 times from here to reach the total private sector investment in gold via ETFs or in bars and coins”.
Grayscale itself has recently increased its funds in cryptocurrency to meet the growing demand of institutional investors.
Why investors choose Bitcoin instead of gold
It seems that the price growth of Bitcoin and its solidity can no longer be ignored.
After all, the comparison with gold speaks for itself. Bitcoin, from January to today, has seen a growth of more than 100%, from 7,200 dollars at the beginning of 2020 to the current 15,000, values that it has not seen since January 2018. It was the time of the bursting of the speculative bubble. Today, however, the situation is clearly different.
Gold has certainly not disfigured. It opened the year at 1,500 dollars an ounce, then in August it reached the annual historical record of over 2,000 dollars. It is currently worth around 1955 dollars an ounce, with a YTD increase of 29%. In short, it is a modest trend if compared to that of Bitcoin.
This explains why institutional investors are reviewing their portfolios.