Cryptocurrency News

Grayscale’s Bitcoin Trust Is Growing while Gold ETFs Record Modest Outflows – JPMorgan

By November 25, 2020 No Comments

Key highlights:

  • Crypto asset manager Grayscale saw more than $1 billion inflows to its crypto funds in Q3
  • JPMorgan analysts contrasted Grayscale’s growth with modest outflows from gold ETFs
  • Some analysts are predicting a bear market for gold, and the COVID-19 vaccine progress is looking like a bearish factor for the precious metal

Leading crypto asset manager Grayscale’s »Drop Gold« advertising campaign was design to convince investors that Bitcoin is a superior investment to gold. Grayscale ran the »Drop Gold« campaign last year, but it seems that its main message is resonating better right now. Michael Sonnenshein, the managing director of Grayscale, described 2020 as an unprecedented year regarding wealth inflows for the firm.

He added that Grayscale had raised more than $1 billion in Q3 of 2020. It seems that this trend is continuing in Q4, too. According to analysts at JPMorgan, it’s interesting to note that inflows to the Grayscale Bitcoin Trust are growing while there has been an outflow of funds from Gold ETFs (exchange-traded funds). According to the JPMorgan report, gold ETFs have experienced mild outflows since the middle of October. It looks that people who were investing in gold are now considering alternatives like BTC. Bitcoin has many advantages compared to gold, and it seems that more investors are gradually coming to this conclusion.

The investment preferences of generations are different, and it seems that Bitcoin is a more popular choice for the new generation. There was a big rally for gold this year, and it lasted until midsummer. After August’s peak, gold price declined, and now it has decreased by around 10%.

The impending COVID-19 vaccine was a factor that impacted gold’s positive trend. At the same time, Goldman Sachs believes a sharp rise in inflation is not probable for the next couple of years, making gold less appealing. Many analysts now predict a bear market for gold, and sentiment surrounding this precious metal is quite negative.

The Grayscale ad campaign revolved around generational investment choices, and now it looks like the millennials are choosing Bitcoin. Everything is becoming digital in today’s world, and investments are no exception. The outflows from gold funds have clear messages regarding a change in preferences.

People can store Bitcoin in digital wallets, and they can transfer BTC around the world very quickly. Unlike gold, Bitcoin is also easily divisible, and can be quickly sent across the globe. These advantages are serious, and people are considering them. Bitcoin is can be described as digital gold, and it will shape the future of money.