Summary Bitcoin ETFs are approaching Gold ETFs in AUM. Even the GBTC ETF has regained AUM momentum, but it remains less attractive due to its 1.50% expense ratio. Bitcoin ETFs are experiencing record inflows. In my view, this signals growing institutional and retail interest in BTC as a maturing global reserve asset. Despite being technically superior over gold, BTC remains volatile and underperformed gold YTD; investors should size exposure to their risk tolerance. I recommend a HOLD for existing GBTC holders (for example, to avoid taxable events), but new investors should consider lower-cost alternatives like BTC or IBIT for Bitcoin exposure. Between the end of 2024 and earlier this year, I covered most Bitcoin ETFs as part of my “Bitcoin ETFs Showdown” series . Back then, I found the Grayscale Bitcoin Trust ETF ( GBTC ) to be a sub-par choice , given its hefty expense ratio and deteriorating liquidity metrics. Yet, to my surprise, GBTC has actually seen an increase in popularity. After losing its crown as the most capitalized Bitcoin ETF earlier in 2025, its Assets Under Management [AUM] have increased again in the last few months. This is illustrated in my table below (column "AUM Δ P6M"), with data updated as of July 2025. Top BTC ETFs, Comparison (Author's Work) This trend fits the overall growth of Bitcoin ETFs, which have reached record AUMs last month. This is what I will cover in this article, coming back to GBTC as a potential vehicle for investment, together with its “little brother,” the Grayscale Bitcoin Mini Trust ETF ( BTC ). The Gold vs. Bitcoin debate: my thoughts Bitcoin ETFs have shown steady growth in AUM since their launch. To the point that their total AUM is now approaching that of gold ETFs (see chart below). Gold vs. BTC ETF AUM (Bespoke Investment Group) Does this mean Bitcoin is taking over gold? Let me be clear - I do not think Bitcoin and Gold are mutually exclusive. I believe there is more than enough room for both assets , especially considering the current state of the US and world economy, with rampant currency debasement, fiscal recklessness and a return to lower interest rates. Merely from a technical standpoint, I do believe that Bitcoin is superior to gold - something I covered extensively in my past articles about the cryptocurrency. Bitcoin has better durability (as it doesn’t decay), portability (moving gold from country to country can prove very difficult), divisibility (it can be divided in 100 million parts) and verifiability (it cannot be faked). Bitcoin has roughly the same fungibility of gold but, more importantly, it is scarcer than gold by a completely different order of magnitude. Gold is present in nature at just above 3 parts per million, while only 21 million Bitcoin will ever exist. On the scale of humanity’s history, I do believe gold is set to eventually become obsolete. The moment sufficient advancements in technology will allow us to access gold in space , gold will have lost its scarcity relative to humanity’s scale. If humanity ever evolves to become a multi-planetary species, I cannot see that being compatible with using gold as a reserve asset. However, within our lifetimes, I think both gold and Bitcoin will be able to thrive in the current geopolitical and macro context. The state of Bitcoin: BTC ETFs inflows at odds with BTC on exchanges The fact Bitcoin possesses great technical characteristics does not mean, of course, it will actually replace or match gold in market capitalization - not within our lifetime, nor possibly ever. For that to happen, institutions and retail investors alike actually need to buy and hold Bitcoin long term, believing in the investment thesis. And here’s why I find the new AUM highs as confirming for my bullish thesis: this proves that interest is out there and more and more people decide to hold BTC. This is compatible with Bitcoin maturing as a global reserve asset (and not a currency ). However, this trend may appear to go against other trends that I have observed and discussed in my past coverage of BTC. Most of all, the decline of Bitcoin held in exchanges. Bitcoin exchange balance has been on a steady decline since the launch of Bitcoin ETFs (see chart below). This means that increasingly more Bitcoin is held in self storage on hard or paper wallets than on crypto exchanges. BTC In Exchanges, Chart (MacroMicro) This is a trend that I find as somewhat puzzling, considering how most BTC ETFs use Coinbase Global, Inc. ( COIN ) as custodian, meaning that (at least in theory) their Bitcoins should appear on exchanges. I personally explain this apparent paradox with the following dynamics: The rate of holders switching from exchanges (or ETFs) to self-custody outpaces ETF inflows. Some of the Bitcoin held by ETF custodians is moved outside of the exchanges in cold storage by the custodians themselves, and may not appear in these charts. Some Bitcoin ETFs use self-custody rather than a custodian, and their wallets may at least partially appear as off-exchanges. What matters, however, is that both dynamics are bullish in the context of Bitcoin maturing into a global reserve asset: more inflows into ETFs showcase retail (and institutional) interest. Less Bitcoin on exchanges indicates long term holders are prevailing short-term traders, and may even signal an incoming supply shock. While I find the latter dynamic the more bullish one, I welcome ETF inflows as a sign of maturity of Bitcoin. This article is not focused only on Bitcoin, therefore, I am not going to go further with my full investment thesis. I do, however, invite curious readers to go through my extensive coverage of this cryptocurrency on Seeking Alpha. Risks of investing in Bitcoin today Bitcoin remains a volatile asset, and it is worth noting it underperformed gold YTD. As I stated, even if Bitcoin has all the technical characteristics to become a global reserve asset, this is far from a certainty in itself. I think investors should only be exposed to Bitcoin to the extent they can tolerate high volatility, and be very wary of the chance that Bitcoin remains “stuck” at levels near where it is today for the foreseeable future. In my past Bitcoin coverage , I did discuss a bearish thesis on Bitcoin that sees it remaining a sort of “online casino”, with its only value derived from volatility and short term trading. This outcome is still a possibility at the time of writing and should be kept in mind by investors. Conclusion: Should you invest in GBTC (and the BTC ETF)? When I analyze investment funds, I always try to go back to the fundamental reason why they were launched in the first place. Among Bitcoin ETFs, GBTC has one of the most peculiar stories. The fund was launched in 2013 as a private, open-ended fund that invested in Bitcoin. Back then, GBTC represented the only way to gain exposure to Bitcoin via a listed instrument in the stock market. It was also a way to gain exposure to Bitcoin while being technically under the SEC jurisdiction. Given that regulatory framework, a somewhat hefty management fee was justified. Today, with a dozen more Bitcoin ETFs to choose from, it is difficult for new investors to justify being exposed to an ETF that costs more than five times its peers. GBTC has started slightly lagging behind its competition since last year, as shown by the chart below. GBTC vs. IBIT, P1Y (Seeking Alpha) Unsurprisingly, GBTC has lost much of its AUM since its conversion to an ETF. Not last because many investors were in GBTC to cash out its (now long gone) mNAV discount pre-ETF conversion. Today, GBTC keeps existing as is because, in my view, it provides a good revenue stream for its issuer, Grayscale. Rather than simply lowering its expense ratio to match rivals, Grayscale has decided to launch an alternative Bitcoin ETF to be competitive on the market. This is the Grayscale Bitcoin Mini Trust ETF. A plateau of AUM for GBTC of is understandable, as people may still stay invested for different reasons: To avoid having to pay capital gains. For lack of access to other funds in some specific situations (e.g., retirement accounts managed by Grayscale). For ignorance about better options or simple laziness. Personally, I once again find myself recommending other funds for Bitcoin exposure, due to GBTC’s hefty expense ratio at 1.50%. These include BTC, the “little brother” of GBTC, with its competitive 0.15% expense ratio, as well as the iShares Bitcoin Trust ETF ( IBIT ), my favorite Bitcoin ETF. However, for investors who already have GBTC in their portfolio and fall within the first two cases I mentioned above, I recommend a HOLD .
