Bitcoin ETFs could mirror golds history of 'spectacular gains' and 'painful drawdowns,' analyst says
Quick TakeBitcoin ETFs are likely to test investors‘ patience, following gold’s path of “spectacular gains” and “painful drawdowns,” according to Bloomberg ETF analyst Eric Balchunas.Comparing BlackRocks IBIT with GLD, Balchunas says sentiment-driven demand can produce both “price explosions” and prolonged periods of stagnation. Bitcoin exchange-traded funds may be following the same boom-and-bust trajectory as gold ETFs, with explosive gains giving way to decline and extended periods of stagnation, according to Bloomberg Senior ETF Analyst Eric Balchunas. “Both are wrappers around non-yielding stores of value that generate no cash flow, leaving investor sentiment—not earnings, coupons or government support, as with stocks and bonds—to drive performance,” Balchunas argued Friday in a post to X. The analyst added that the limited expansion of both bitcoin and gold supply can translate into surging demand that produces “price explosions.” But that demand can also be fickle, he said, arriving in waves rather than building steadily. Balchunas analysis comes as BlackRocks IBIT, the worlds largest spot bitcoin ETF, manages about $60 billion in assets — far below the $100 billion it briefly reached in October, when bitcoin climbed to an all-time high. The analyst said the iShares Bitcoin Trust (IBIT) held above the $100-billion AUM threshold for only a few