Research Report
Potential Bitcoin ETF Impact with Historical Context
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October 23, 2023

Will a Bitcoin ETF meaningfully impact the legitimacy, price, or adoption of bitcoin? We can look at a similar situation with the launch of the first Gold ETF in 2004 to provide some clues on what a spot bitcoin ETF would mean for bitcoin.

Gold was a longstanding store of value accepted globally; however, buying and selling Gold was cumbersome, costly, and outdated relative to other asset classes. Even if investors wanted to gain gold exposure, the hoops and costs associated with taking a position in Gold were non-starters. Like bitcoin today.

The launch of the SPDR Gold ETF in 2004 changed the dynamic, with an investment in Gold now supported by the proper infrastructure to move mainstream. With reduced transaction costs, a more transparent market, and increased accessibility, the barriers to an investment in Gold fell, resulting in increased allocation.

The SPDR Gold Trust ETF "amassed more than $1 billion in assets in its first three days, starting November 18, 2004, which sealed its place in history as the fastest an ETF has ever attracted that level of assets. Within 15 months, it had raked in $5 billion, and within three years, it had $10 billion.”*

As an asset, bitcoin faces the same challenges and more skepticism. With the introduction of a spot bitcoin ETF, the pool of potential investable dollars will increase, and the difficulty of allocating to bitcoin should decrease, creating an environment for accelerating allocation. Sidelined investors can now enter the game.

*Source: Institutional Investor

About Eaglebrook Advisors
Eaglebrook is a tech-driven investment manager specializing in bitcoin and digital assets. The firm offers various Bitcoin and Digital Asset SMAs serving financial advisors, registered investment advisors (RIAs), family offices, and institutions. Eaglebrook is backed by wealth management executives and institutions.
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