Bitcoin ETFs Set to Surpass Gold ETFs

Context

James Seyffart, an ETF analyst quoted on Apr 4, 2026, told Cointelegraph that Bitcoin ETFs "will be larger" than gold ETFs, framing a renewed debate about digital-asset products' role in institutional portfolios (Cointelegraph, Apr 4, 2026). The statement comes nearly 27 months after the U.S. Securities and Exchange Commission approved multiple spot Bitcoin ETF applications on Jan 10, 2024 — a watershed that permitted 11 U.S. spot Bitcoin ETF vehicles to begin trading (SEC release, Jan 10, 2024). Gold ETFs have dominated the 'store of value' ETF category for two decades; State Street launched SPDR Gold Shares (GLD) on Nov 18, 2004, creating the blueprint for commodity ETF adoption (State Street, Nov 18, 2004). The juxtaposition of a nascent ETF cohort built on a volatile digital asset against a long-established gold ETF complex is reshaping conversations among allocators about use case, liquidity, and portfolio construction.

Institutional commentary has shifted from technical custody questions to product economics and investor utility. Where regulatory and custody risks were once the gating factors for spot Bitcoin products, the post-2024 period has centered on scalability of flows, secondary-market liquidity, and the operational parallels with commodity ETFs. Seyffart's claim should therefore be read as both market observation and a forecast about investor behaviour: that demand dynamics and product utility will allow Bitcoin ETFs to reach equal or greater aggregate assets under management (AUM) than gold ETFs over time. That projection depends on multiple inputs — inflows, retail versus institutional participation, fee compression, and macro-cyclical sentiment toward risk assets — each of which can be measured and debated.

For institutional investors, several concrete datapoints anchor the debate. The Cointelegraph piece (Apr 4, 2026) captures the analyst's view; the SEC's Jan 10, 2024 approvals saw 11 spot Bitcoin ETFs commence trading in the U.S., an operational milestone that materially increased market access (SEC, Jan 10, 2024). Historically, Bitcoin's market capitalisation crossed roughly $1 trillion in April 2021, illustrating the underlying asset's capacity to reach institutional-scale market caps even before broad ETF access (CoinMarketCap, Apr 2021). These dated markers — Jan 10, 2024; Nov 18, 2004; Apr 2021; Apr 4, 2026 — frame a comparative timeline that investors can use to stress-test Seyffart's assertion.

Data Deep Dive

A rigorous assessment requires separating product-level metrics (AUM, fees, trading volume) from asset-level metrics (market capitalisation, volatility, correlation with traditional benchmarks). On the product side, the rapid listing of 11 U.S. spot Bitcoin ETFs on Jan 10, 2024 created a concentrated competitive set whose early flows, fee schedules, and secondary-market liquidity are transparent on exchange tapes and regulatory filings (SEC, Jan 10, 2024). By contrast, gold ETF supply is broad and global, led by legacy vehicles such as GLD, which has existed since Nov 18, 2004 and has served as the benchmark product for gold exposure (State Street, Nov 18, 2004). Aggregating AUM across gold ETFs and comparing that to cumulative AUM of Bitcoin ETFs requires consistent accounting, but the unit economics and distribution channels differ materially across both universes.

Volatility and correlation data matter for portfolio construction. Bitcoin's realized volatility historically exceeds that of gold by a wide margin; Bitcoin recorded multi-hundred percent annualized moves in early cycles, whereas gold's annualized volatility typically sits in the low double-digits. This risk profile affects the amount of capital an allocator is willing to commit via an ETF wrapper. Correlation metrics also differ: gold has historically exhibited low correlation to equities and a sometimes negative correlation to real yields, while Bitcoin's correlation to equities has increased in recent cycles, altering its diversification characteristics. These empirical relationships — volatility, correlation, drawdown magnitude — will determine whether assets that end up inside ETFs are bought as diversifiers, risk-assets, or tactical allocations.

Primary-market economics are decisive. ETF fee compression, custody costs, and the liquidity of underlying markets govern the net benefit to investors and the capacity of ETFs to scale. Bitcoin's custody and settlement costs have declined as institutional custody providers matured after 2020, and the Jan 10, 2024 approvals institutionalised a trading and custody ecosystem for spot products. Conversely, gold benefits from a multi-decade physical market, ETF leasing/creation mechanisms, and a large ecosystem of bullion dealers. Comparing year-over-year growth of ETF flows — for example, the initial post-approval inflows into the earliest U.S. spot Bitcoin ETFs versus comparable gold ETF flows following GLD's launch — offers a useful, if not perfectly analogous, yardstick for potential scale.

Sector Implications

If Bitcoin ETFs scale to rival or exceed gold ETFs in aggregate AUM, the implications span market structure, asset-manager economics, and investor behaviour. For asset managers, the capacity to capture recurring flows and fee revenue from a large Bitcoin ETF franchise would transform the economics for providers who can secure low-cost custody and efficient creation/redemption mechanics. For exchanges and market-makers, the liquidity profile of the underlying Bitcoin market will influence spreads and capacity limits for large institutional blocks. The historical precedent is instructive: commodity ETFs grew rapidly when they solved distribution and operational frictions for investors, and a similar dynamic could play out for Bitcoin given the product enhancements since 2020.

For investors, the question is about the role — complement to gold, stand-alone risk allocation, or speculative exposure. A scenario in which Bitcoin ETFs exceed gold ETF AUM would suggest investors are treating Bitcoin as a mainstream store-of-value or systematic allocation, not merely a high-beta asset. That outcome would likely require sustained retail and institutional inflows over multiple years, fee compression to parity with other major ETFs, and durable custody/operational infrastructure. Comparison-wise, the 11 spot Bitcoin ETFs that began trading on Jan 10, 2024 created the distribution channels necessary to test that thesis at scale (SEC, Jan 10, 2024).

Regulatory and cross-border dynamics also matter. Unlike gold, which trades on established commodity and bullion markets, Bitcoin's regulatory classification varies across jurisdictions; U.S. approvals in 2024 resolved one major regulatory uncertainty but global harmonisation remains incomplete. Differential regulation could produce asymmetric growth rates across geographies, meaning aggregate global AUM comparisons between Bitcoin and gold ETFs must account for these jurisdictional effects. Institutional investors should therefore monitor both onshore (U.S., EU) and offshore ETF developments and related custody, tax, and accounting guidance.

Risk Assessment

Key risks that could prevent Bitcoin ETFs from surpassing gold ETFs are straightforward: asset-price volatility, regulatory reversals, operational failures, and shifts in macro sentiment. Volatility can deter risk-averse allocators; a sustained drawdown in Bitcoin of 50% or more could materially reduce ETF inflows and reset expectations. Regulatory risks — for instance, adverse guidance on custody, leverage, or retail marketing — could slow adoption or impose cost structures that cap growth. Operational incidents, including custodian failures or exchange outages, would degrade confidence in spot products.

Macroeconomic conditions present a second-order risk. Gold's historical role as an inflation and geopolitical hedge is well entrenched in institutional mandates; Bitcoin must replicate or displace that narrative to secure similar allocations. Should global macro conditions favor risk-off allocations, gold may continue to draw flows due to its low volatility and long track record. Conversely, a prolonged risk-on environment that favours high-beta assets could accelerate Bitcoin ETF growth. Scenario analysis should therefore incorporate macro regimes, not just product mechanics.

Finally, market-structure constraints such as underlying liquidity and concentration of holdings could create capacity ceilings. If a small number of custodians or market-makers control large swathes of ETF mechanics, concentration risk will affect institutional uptake. The experience since Jan 10, 2024 — when 11 spot Bitcoin ETFs launched — showed both the benefits of standardized product specs and the initial concentration in top-tier issuers; how that concentration evolves will shape long-term scalability (SEC, Jan 10, 2024).

Fazen Capital Perspective

Fazen Capital's view diverges from binary interpretations that treat Bitcoin ETFs as either destined to eclipse gold ETFs or doomed to perennial niche status. A more nuanced outcome is probable: Bitcoin ETFs will likely achieve parity with certain segments of the gold ETF market — specifically, retail-directed, tradeable wrappers — while gold will retain superiority in liabilities-driven, central-bank, and jewelry-replacement demand pathways. The contrarian insight here is that parity in AUM does not equate to parity in function; Bitcoin ETFs may command similar dollar volume while serving distinct investor objectives, from tactical exposure to digital-native wealth allocation.

Operationally, we anticipate incumbency advantages to persist among large ETF issuers who can offer multi-asset packaged solutions and low fees. The 11 spot Bitcoin ETFs that commenced trading on Jan 10, 2024 validated distribution capacity, but the winners will be those who integrate custody, allocation tools, and advisory overlays compatible with institutional mandates (SEC, Jan 10, 2024). Investors should also consider cross-product strategies — for example, blended allocations to both Bitcoin and gold ETFs to manage idiosyncratic risks — rather than framing the decision as a zero-sum competition.

For allocators focused on risk budgeting, the practical implication is to treat Bitcoin ETF exposure as a distinct risk factor that can be sized incrementally and monitored with clear stress tests. Fazen Capital encourages clients to review operational controls, counterparty credit, and scenario-based capital at risk under both market stress and regulatory-change scenarios. For further reading on product structure and ETF market microstructure, see our research hub topic and related notes on ETF flows and liquidity topic.

Bottom Line

Analyst James Seyffart's assertion on Apr 4, 2026 that "Bitcoin ETFs will be larger" than gold ETFs crystallises a plausible market trajectory rather than a foregone conclusion; the path depends on sustained inflows, fee compression, regulatory stability and demonstrable utility to institutional mandates (Cointelegraph, Apr 4, 2026; SEC, Jan 10, 2024). Investors should evaluate ETF-level mechanics and asset-level behavior in tandem when assessing the potential for Bitcoin ETFs to reach or exceed the scale of gold ETF complexes.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.