There’s gold, which is a precious metal, and then there’s digital gold, also known as Bitcoin.
For about 20 years, a relatively easy way to invest in pristine gold was to buy ETFs such as: GLD on State Street.
Since last month, digital gold – Bitcoin (BTC) – has been Bitcoin ETF.
The largest gold ETF, the aforementioned GLD, has an expense ratio (a measure of how much the ETF issuer charges investors) of 0.4%. All but one of the 10 newly approved Bitcoin ETFs (with the exception of Grayscale’s GBTC) have low expense ratios.
In the blink of an eye, Digital Gold will be cheaper to buy than the OG version.
“*Nobody* expected it to happen this quickly,” said Nate Geraci, president of ETF Store. Posted in X.
Traditional types of gold are seen as a haven for investors who want to avoid the daily, sometimes hourly, or even less twists and turns of financial markets. Although this is not the only option, gold is generally easier to purchase than other uncorrelated assets such as art, collectibles, real estate, and music royalties. One ounce of gold is worth about $2,000, so a little goes a long way. Towards hiding your savings. His ETFs that hold them take up even less space, with only a few bits of data stored on some brokerage firm’s computers.
Bitcoin is seen by many as a more modern store of value. And given the relatively low amount that Bitcoin ETFs charge investors, it’s an even cheaper hedge for investors. Ten issuers introduced it on January 11th.
For example, Franklin Templeton’s management fee is 0.19%, the lowest of all issuers. Most are less than 0.30%. In contrast, the largest gold ETF, SPDR Gold Trust, has a fee of 0.40%.
Matt Hogan, chief investment officer at Bitwise, one of the issuers of Bitcoin ETFs, said that while gold is usefully compared to Bitcoin by some investors due to its similarities, the metal is He also said that it is very different from currency.
He said gold is better than Bitcoin in some ways because it has been around much longer, but Bitcoin is much easier to store, move, divide, and use, and is harder to counterfeit. He also said it was worse.
“Many people have focused on the fact that Bitcoin is inferior to gold in certain properties, and therefore its potential market capitalization is a fraction of that of gold. But more importantly “What if Bitcoin is better than gold in many ways, and therefore the addressable market for Bitcoin is much larger than gold?” he said. “Actually, I think that’s likely.”
Bitcoin’s value comes from the fact that it is a rare asset, similar to gold, with a limited supply of 21 million Bitcoins. Also, like metals, it has autonomy and is not subject to government influence.
“I like to think of Bitcoin as digital supergold,” said Austin Alexander, co-founder of LayerTwo Labs, a venture focused on advancing Bitcoin. “Digital gold has the same functions as gold, but even more. It is rarer, more durable, and easier to transmit than gold.”