Bitcoin ETFs could mirror gold’s history of 'spectacular gains' and 'painful drawdowns,' analyst says

Bitcoin exchange-traded funds may be following the same boom-and-bust trajectory as gold ETFs, with explosive gains giving way to decline and extended periods of stagnation, according to Bloomberg Senior ETF Analyst Eric Balchunas.

"Both are wrappers around non-yielding stores of value that generate no cash flow, leaving investor sentiment—not earnings, coupons or government support, as with stocks and bonds—to drive performance," Balchunas argued Friday in a post to X.

The analyst added that the limited expansion of both bitcoin and gold supply can translate into surging demand that produces "price explosions." But that demand can also be fickle, he said, arriving in waves rather than building steadily.

Balchunas' analysis comes as BlackRock's IBIT, the world’s largest spot bitcoin ETF, manages about $60 billion in assets — far below the $100 billion it briefly reached in October, when bitcoin climbed to an all-time high. The analyst said the iShares Bitcoin Trust (IBIT) held above the $100-billion AUM threshold for only a few hours.

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Going back in time more than a decade, Balchunas compared IBIT's short time above $100 billion with the SPDR Gold Trust's (GLD) precipitous rise in 2011, when the gold fund briefly surpassed SPY to become the world’s largest ETF. What followed, he says, could offer insights into what's next for bitcoin ETFs.

"I feel like there's a spiritual parallel [between] GLD and IBIT," he said, pinpointing how after GLD soared in 2011, it spent "eight years in doldrums trying to get back to that place." Potentially offering investors some comfort, Balchunas said that while the GLD fund suffered from years of weaker demand, "each cycle for gold ETFs has increased the high water mark."

GLD, State Street's gold-based ETF, began trading in 2004.

IBIT’s assets have contracted alongside bitcoin's price (BTC), which traded near $63,000 on Friday, down about 30% this year and roughly 50% from its October record. Gold has also declined in 2026, although its losses have been considerably less severe.

Spot gold traded near $4,000 an ounce Friday, down roughly 7% year to date but still about 19% higher over the past 12 months.

The broader crypto downturn has also weighed on BlackRock’s overall digital-asset business. The firm reported this week that its second-quarter digital-asset AUM fell about 40% year over year to roughly $49 billion, from nearly $80 billion, primarily reflecting sharp declines in bitcoin and ether prices.

Weaker prices and investor sentiment have also weighed on crypto ETF flows. The trend eased last week, however, when U.S. spot bitcoin and ether ETFs recorded weekly net inflows for the first time since early May.