Bitcoin ETF Hype Is More Memestock Than Gold 2.0

The regulatory approval of an exchange-traded fund isn’t supposed to be a mass-media event worthy of Wrestlemania. Yet here we are. The hype around US spot Bitcoin ETFs has reached meme levels akin to pandemic-era laser eyes: Crypto prices are soaring, hackers are mobilizing and Redditors are pumping. But the promise of game-changing, gold-like adoption looks like a meme too far.

The speculative build-up to US Securities and Exchange Commission approval of the product has been music to the ears of Wall Streeters scrambling to flog ETFs at low, low prices — with fees set at around 0.2% to 0.4% and the prospect of as much as $4 billion being gathered on the first day alone for some 11 funds in the pipeline, according to Bloomberg Intelligence. Crypto bros should feel free to gloat as ETF leader BlackRock Inc.’s Larry Fink flips from calling Bitcoin an “index of money laundering” to saying it’s “digitalizing gold.”


Yet cooler heads might wonder what happens next. The optimistic thesis from those who have been pushing for this kind of ETF for years, such as the Winklevoss twins, is that this is indeed Gold 2.0. If Bitcoin is increasingly held as a digital store of value, more a shiny object to hoard than a fintech killer app, analysts reckon there’s much more upside to the current price. The twins’ crypto exchange, Gemini, reckons an ETF is key to making Bitcoin look like a legitimate home for a chunk of $36.7 trillion of savings and retirement cash — similar to the adoption of gold after its first ETF 20 years ago.

But the road to Gold 2.0 for Bitcoin looks neither straight nor shiny. The approval of a spot ETF in 2024 comes fairly late: Bitcoin isn’t an unknown quantity and there are already many ways to get exposure, from stocks to ETF-like products. The fact these products have tended to start off with a bang before fizzling out, underperforming or even shutting down — similar to the crypto market’s hype cycles — means financial advisers may find it easier to preach to the converted than drum up support from nervous neophytes.