Is The Bitcoin ETF (BITO) The New GLD?

The SEC accredited the brand new bitcoin ETF on Friday. It began buying and selling immediately beneath the ticker BITO.  

Whether or not you imagine bitcoin will finally survive authorities regulation or not, the introduction of an ETF that tracks bitcoin futures, creates entry for a brand new viewers. For institutional buyers, now they will allocate to bitcoin, inside their mandate. And it permits particular person buyers who might have by no means participated in bitcoin, to purchase it of their regular brokerage account.  

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With that, there are attention-grabbing similarities to the 2004 launch of the primary gold ETF (GLD)

GLD
. GLD supplied a brand new and simple means for conventional long-only institutional buyers, in addition to people, to allocate to gold. And with that, gold costs took off. Gold was low $400s on the time, and by no means appeared again.  The worth of spot gold rose virtually five-fold over the next seven years.

So, this bitcoin ETF ought to profit equally from these new flows. However there could also be extra to this GLD comparability. Many view bitcoin as the brand new gold — as a retailer of worth and hedge in opposition to inflation. With that, within the face of the most well liked inflation we have seen in many years, we’ll see if cash strikes out of GLD, to fund new investments in BITO.

It is early, however thus far we are able to see some divergence within the charts that recommend that, no less than, speculators are taking bets that this “swap” (GLD for BITO) might occur. 

Learn extra of my every day notes at BillionairesPortfolio.com.