Bloomberg Intelligence ETF analyst Eric Balchunas has suggested that Bitcoin exchange-traded funds (ETFs) could follow market cycles similar to those seen in gold ETFs over the last two decades. Balchunas, who closely tracks ETF market dynamics, pointed to the history of the SPDR Gold Shares ETF (GLD) as a possible roadmap for how BTC ETFs might evolve as institutional investment vehicles.
Gold ETF performance offers roadmap for Bitcoin funds
Balchunas observed that both gold ETFs and BTC ETFs are structured as investment products around assets that do not produce cash flow. Unlike equities or fixed-income instruments, their value relies heavily on investor sentiment and demand rather than dividends, interest payments, or government backing.
He commented that Bitcoin ETFs may be replicating a familiar pattern: periods of major price appreciation are followed by sharp declines and gradual recoveries. Balchunas further noted that prolonged downturns in gold ETFs have historically paved the way for new all-time highs in assets under management, supporting the idea that patient investors may see higher peaks over time.
Bitcoin ETFs may be following the same script: spectacular gains, painful drawdowns and recoveries that may test investors’ patience. Despite extended bear markets for gold ETFs, each major cycle has ultimately resulted in a higher peak.
Mini dictionary: SPDR Gold Shares (GLD), launched in 2004, is the world’s largest physically backed gold ETF, providing investors direct exposure to gold prices through a regulated, liquid vehicle.
GLD sets precedent for market fluctuations
Balchunas referred to Bloomberg Intelligence data showing that GLD has weathered notable cycles in assets under management throughout its history. Assets once reached $76 billion, declined to about $22 billion, recovered to $84 billion, then fell again to $48 billion, and recently surged to around $190 billion.
He also pointed to milestones in ETF rankings, highlighting that GLD briefly became the world’s largest ETF in 2011 before experiencing several years of reduced momentum. In a similar vein, BlackRock’s iShares Bitcoin Trust (IBIT) recently surpassed $100 billion in assets, then saw growth slow as market conditions consolidated.
| ETF | Previous Asset Peak | Lowest Point | Recent Asset Level |
|---|---|---|---|
| GLD | $76B | $22B | $190B |
| IBIT | $100B | N/A | N/A |
Institutional demand drives ETF cycles
Balchunas explained that, unlike traditional stocks or bonds, the value of Bitcoin ETFs depends on both the underlying asset and investor inflows. Because the supply growth for both gold and Bitcoin is relatively limited, significant inflows can rapidly boost prices when market appetite rises.
He cautioned, however, that institutional demand is characteristically unpredictable. Demand often comes in waves rather than maintaining a steady pace, which can trigger fluctuations in both price and fund asset levels.
Demand can be fickle and come in waves versus steady, so investors should expect volatility even as long-term adoption rises.
Early phase for Bitcoin ETF adoption
Although Bitcoin ETFs have drawn growing interest, they remain at an early stage of institutional adoption compared to gold ETFs. Major investors, including pension funds and wealth managers, continue assessing the role of Bitcoin ETFs within diversified portfolios and regulated investment strategies.
While Balchunas cautioned that historical parallels do not ensure future outcomes, he emphasized that tracking the cyclical nature of ETF flows can help investors form more realistic expectations. As global ETF adoption expands, inflows, regulatory decisions, and institutional involvement are set to play key roles in shaping Bitcoin ETF growth.
