The iShares Bitcoin ETF (IBIT) has done well and broken records in the financial services industry as its assets surged to over $54 billion. This is a great performance since the popular SPDR Gold ETF (GLD), which was started in 2004 has accumulated $80 billion in assets. That is a sign that IBIT will eventually pass GLD in the coming years. This article explains why the IBIT ETF may surge, and why there is a better alternative to buy.
The bullish case for the IBIT ETF
The IBIT ETF has done well, and there are chances that it will soon have a strong bullish breakout. First, Bitcoin will likely have a strong bullish breakout in the long term. While history is not the best predictor of an asset, we can use historical data to predict what it will do in the future.
Bitcoin was started in 2009 and was trading below $1 at the time. It then surged to a record high of $109,200 earlier this year. Bitcoin’s surge to $109,000 was not linear. Instead, it faced major crashes in the last 16 years.
For example, Bitcoin’s price peaked at $68,500 in 2021 and crashed by 76% by December 2021, as FTX, Celsius, and Terra crashed. It also crashed by 85% between December 2017 and December 2018.
Most recently, it soared to a high of $73,756 in March 2024 and then retreated to $49,325 in July. In all this time, Bitcoin has managed to beat odds and stage a strong comeback. Therefore, there is a likelihood that the coin will emerge from the current consolidation and rebound.
Bitcoin supply and demand dynamics
Second, Bitcoin has one of the best demand and supply dynamics in the financial industry. It has a supply limit of 21 million of which 19.8 million coins have been mined. This means that there are just 1.2 million coins that will ever be mined, a situation that will take time to happen since mining difficulty is rising.
Remember, Bitcoin goes through a halving period every four years that reduces the block rewards by half. As such, there is a likelihood that the 21 million coins will never be mined as the difficulty will keep rising.
Bitcoin demand is also soaring. For example, the IBIT ETF has already accumulated $54 billion worth of coins, while all ETFs have over $140 billion in assets. As such, a combination of falling supply and rising demand means that Bitcoin price will keep surging.
Bitcoin price has strong technicals
The other bullish case for the IBIT ETF is that Bitcoin price has formed a bullish flag and a cup and handle pattern on the weekly chart. A bullish flag has a long vertical line and a rectangle pattern, and in most cases, it leads to more gains.
A C&H pattern, on the other hand, has a rounded bottom and a handle section. In this case, a strong bullish breakout will see Bitcoin price surge to $123,000 in the near term.
Bitcoin price technical chart | Source: TradingView
IBIT ETF is good, but there’s a good alternative
While the IBIT ETF is a good fund to buy, it is not the best. Instead, we believe that the Grayscale Mini Bitcoin ETF (BTC) is the best one to buy. It is a highly liquid fund with over $4.1 billion in assets under management, making it the fifth-biggest fund to invest in.
It beats the IBIT ETF because of its lower fees. It has an expense ratio of 0.15%, lower than IBIT’s 0.25%, giving it a 10 basis point spread. Therefore, since these are similar funds, why would one pay a higher fee? For example, a $100,000 investment in IBIT will cost you $250 a year, while BTC will cost you $150. Besides, IBIT and BTC share a similar custodian: Coinbase.
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