In a report published today by crypto services provider Matrixport, Bitcoin is one step ahead of gold in terms of being a better store of value.
The report compared Bitcoin’s market capitalisation, which at $540billion, is equivalent to 10.8% of the market cap of physical financial gold. Compared to this, gold exchange-traded-funds (ETFs) were valued at $200bn, added Matrixport.
Even though both Bitcoin and gold are known for being stores of value, the former has gained much popularity for being a digital store of value. Matrixport believes that a potential approval by the Securities and Exchange Commission (SEC) of spot Bitcoin ETFs in the US could result in inflows which could reach up to $20 to $30 billion.
A green light from the regulatory authorities could then potentially trigger a large rally for the top cryptocurrency in the market, proclaimed the report. However, the SEC has been quite slow in the process of approving a spot Bitcoin ETF, deliberately taking time in giving out a decision.
In August, the US regulator announced that it was delaying its decision on all new applications until October. The decision was driven by the need for more time to thoroughly evaluate the proposals and to ensure a comprehensive review of the proposed regulatory changes and associated concerns.
The implication of the delay was felt by many major players like Valkyrie, Fidelity, Invesco, and WisdomTree who await a verdict on their respective proposed Bitcoin ETFs in the US.
Despite this, the regulator continues to receive more applications requesting the same. Last month, investment firm Franklin Templeton filed for a $BTC ETF with the SEC which would use the largest crypto as the underlying asset and track its price. This came on the back of a major win for Grayscale’s application for the ETF. On 29 August, the District of Columbia Court of Appeals overturned the SEC’s decision that initially denied the application.
The next deadlines for the regulator to submit filings with updates on several planned Bitcoin funds including BlackRock, Fidelity, Invesco, Bitwise, VanEck, WisdomTree and Valkyrie fall are between 16 October and 19 October of this year. The final deadlines for these proposed funds are in mid-March and the agency is expected to delay it even further until this time.
The crypto industry highly awaits a decision as an approval is expected to trigger a flood of mainstream money into the sector. Other than this, the report also talked about how Bitcoin has an edge over gold as the private keys can be memorised. This efficiently eliminates the risk of confiscation.
Considering the current state of technological developments, Bitcoin’s primary roles are likely as a store of value akin to gold and a speculative financial asset, said Matrixport.
Its head of research, Markus Thielen, further added: “Even today, storing assets in the form of gold has not only become unfashionable in the digital age, but comes with significant restrictions when crossing borders….Bitcoin offers a solution to this dilemma, enabling the swift and relatively inconspicuous movement of value across borders.”