According to Citi, while new exchange-traded funds could benefit Bitcoin as an asset class, it is more likely that cryptocurrencies will rediscover their high correlation with stocks in the short term. The launch of the Spot Bitcoin ETF in the US has been widely anticipated for several months, with many investors looking to buy Bitcoin as the SPDR Gold Shares ETF (GLD) did for gold in 2004. We believe we can revolutionize asset investing. Bernstein recently said that Bitcoin could skyrocket. $200,000 in Bitcoin ETF by the end of next year. Only time will tell, but the fate of cryptocurrencies is more uncertain than gold, Citi analyst Alex Saunders said in a note on Monday. “It still takes several years for bullion ETFs to crystallize their holdings and assets, which has had a structural impact on spot gold prices and increased trading,” Sanders said. . “And that historic change required meaningful catalysts like the Great Financial Crisis and the subsequent zero policy interest rate by the monetary authorities.” Furthermore, Bitcoin was the gold standard before the introduction of gold ETFs. It added that it is newer and less established compared to . It behaves very differently than gold, and the popular narrative of Bitcoin as a safe haven and inflation hedge has not been definitively adopted by investors overall. “This is in stark contrast to the yellow metal’s thousands of years of history,” Saunders said. “Our analysis still likens cryptocurrencies to early-stage networks with an adoption cycle. This means BTC is less likely than gold to be used as a portfolio hedge in financial turmoil. He said the stock beta of cryptocurrencies remains large, but negative for gold. Sanders also added that while the long-term positive correlation between cryptocurrencies and stocks has declined, it is likely to return to near its historical average over time. “In the worst 10-month stock performance since 2010…bonds and gold outperformed, while Bitcoin performed similarly poorly,” he said. “This complicates analysis for investors who try to liken the role of a crypto portfolio to that of gold.” For this reason, we have long emphasized the potential of Bitcoin to serve as “digital gold.” They have also claimed that Bitcoin is a hedge against stocks. The market turmoil of 2022 poured cold water on that idea, as the correlation between cryptocurrencies and stocks reached an all-time high. Last year, that correlation fell to its lowest since 2021, but the correlation between Bitcoin and gold has been rising.