News - "Bitcoin ETFs compete with the SP 500"

By Luc Vesters

"Bitcoin ETFs compete with the SP 500"

Bitcoin (BTC)

In an interview at the Madeira Bitcoin Conference, former MicroStrategy CEO Michael Saylor talked about Bitcoin, gold and the spot ETFs approved in January. "We thought Bitcoin could be a competitor to gold. But it has actually risen to the top of the leaderboard and is now competing with the SP 500," the perma-bull said.

Gold ETFs are already within reach. In the U.S., exchange traded funds on the yellow precious metal are still among the largest commodity ETFs. Bitcoin counterparts, however, will overtake them "in the not-too-distant future." At least if Saylor has his way.

Bitcoin ETFs from the likes of BlackRock, Fidelity - the world's largest asset managers - are a "universal API" that allows institutional investors to easily move in and out of different funds.

Bitcoin, gold and SP 500 in a power struggle

At the end of the trading day on March 5, the total assets of Bitcoin ETFs amounted to USD 51 billion. At the same time, gold ETFs held about USD 95 billion, according to data from Bastion Trading. This means that Bitcoin ETFs have reached more than 50 percent of the assets under management in gold ETFs in less than two months.

Indeed, BlackRock is setting new records every day with the iShares Bitcoin Trust (IBIT). Yesterday, March 6, for example, 4,236 BTC totaling USD 281 million flowed into the investment vehicle. Together, the Bitcoin ETFs have more than 776,000 BTC, which is already 3.95 percent of the Bitcoin currently in circulation.

Compared to the SP 500 SPDR (SPY), Bitcoin has to cede pole position. However, IBIT and GBTC are increasingly managing to hold their own against Vanguard's SP 500 ETF (VOO), as HODL15Capital reports on X (formerly Twitter).

Similar to Bitcoin ETFs - a total of 11 providers have registered such a product with the SEC - there are several ETFs that track the performance of the SP 500 Index. Incidentally, the company founded by Larry Fink manages Bitcoin only indirectly. The actual coins are kept under lock and key at the largest U.S. crypto exchange Coinbase.

Find out what it would mean if BlackRock continues to buy nearly 10,000 BTC a day in this article: Will BlackRock become the world's largest BTC hodler?

MicroStrategy buys BTC: "Bitcoin is the exit strategy"

Saylor has been buying Bitcoin with his software company for years. The company owns a total of 193,000 BTC worth more than US$6 billion. In fact, to continue investing in the cryptocurrency, the company recently took on new debt. The American company plans to issue a total of US$700 million in new bonds to institutional investors.

Meanwhile, selling Bitcoin is out of the question for Michael Saylor, even though his company MicroStrategy's BTC holdings now have a profit of more than US$4 billion. For Saylor, the new all-time high is no reason to diversify his portfolio: "I will always buy at the top. Bitcoin is the exit strategy."

BTC correlates with MSTR I Source: Portfolioslab

BTC correlates with MSTR I Source: Portfolioslab

At the time of writing, BTC is trading at USD 66,762, growing 6.5 percent in the past seven days. MSTR, on the other hand, is trading at USD 1,246 and has risen an impressive 438 percent in a year.

If MicroStrategy continues the long-term growth of recent months, the Bitcoin company may soon even be part of the largest U.S. stock index. You can read all about it in this article: MicroStrategy soon to be in the S&P500?

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