Bitcoin ETFs to mirror gold’s ‘triumph and pain’ cycles, analyst says

U.S. spot Bitcoin ETFs are expected to experience significant gains and painful drawdowns, mirroring gold’s historical pattern, according to Bloomberg Senior ETF Analyst Eric Balchunas. S. spot Bitcoin Exchange-Traded Funds (ETFs) will likely face a path marked by significant gains and painful drawdowns, echoing gold’s historical “triumph and pain” pattern. That’s the outlook from Bloomberg Senior ETF Analyst Eric Balchunas, who believes these digital asset vehicles will mirror the 22-year trajectory of gold ETFs.

His projection comes as the crypto market navigates a challenging period, with Bitcoin’s price dropping by nearly half from over $126,000 to $64,000. Additionally, spot BTC ETFs saw $7 billion in outflows during May and June 2026.

Following gold’s volatile path

Balchunas’s comparison to gold ETFs provides a long-term framework for understanding Bitcoin’s market dynamics. Gold ETFs, first launched around 2004, briefly claimed the title of the world’s largest ETF in 2011.

However, they then entered an eight-year downtrend, struggling to reclaim that top position until 2024. This “two steps forward, one step back” pattern has characterized gold’s journey, accumulating between $160 billion and $235 billion in assets under management (AUM) over two decades.

The nature of non-yielding assets

The parallel between Bitcoin and gold stems from their shared structural characteristics. Both are “wrappers around non-yielding assets that generate no cash flow,” as Balchunas describes them.

Their performance relies primarily on investor sentiment and speculative demand, rather than any underlying earnings or government guarantees. This sentiment-driven nature often leads to demand arriving in waves, causing cyclical market behavior.

Gold ETFs have, at times, experienced price drawdowns of roughly 40%. About one-third of gold ETF assets exited within a six-month period during one particularly difficult stretch, illustrating the patience required from investors.

Bitcoin ETF performance: initial surge and recent headwinds

Since their debut in January 2024, U.S. spot Bitcoin ETFs have seen remarkable initial interest. Investors have poured over $37 billion into these funds within their first year, pushing total estimated AUM close to $120 billion.

BlackRock’s IBIT (NASDAQ:IBIT) alone attracted $38 billion in inflows, becoming a $50 billion fund faster than any other ETF in history. Currently, IBIT manages roughly $60 billion in assets, down from the $100 billion it briefly touched for only a few hours in October when Bitcoin hit its all-time high.

Despite these early successes, the market has faced recent challenges. Spot BTC ETF outflows reached $7 billion in May and June 2026, coinciding with Bitcoin’s brief slip below the $60,000 mark.

Investor resilience and long-term outlook

Even with these significant drawdowns and outflows, investor behavior in Bitcoin ETFs shows notable resilience. Only 10% of spot Bitcoin ETF holders have exited, a stark contrast to the one-third of gold ETF investors who left during gold’s more painful periods.

This suggests a stronger conviction among current Bitcoin ETF investors. Long-term Bitcoin holders (LTHs) also provide an encouraging sign, as their 30-day net position remained positive, even as ETFs shed nearly $4 billion in June.

While LTHs have slowly reduced their exposure in recent weeks, they haven’t become net sellers yet, indicating long-term conviction remains largely intact. Bitfinex analysts attributed the recent dip below $60,000 to deleveraging and ETF outflows, not a breakdown in LTH confidence.

Geopolitical factors and safe haven status debate

The ongoing geopolitical climate, specifically renewed U.S.-Iran escalations, is also impacting the performance of both gold and Bitcoin. Interestingly, neither asset has seen strong investor interest as a traditional safe haven recently, despite their usual appeal during instability.

In the past three months, gold ETFs recorded about $11 billion in outflows, while spot BTC ETFs bled $6 billion. This means gold saw twice as many outflows as Bitcoin during this period of heightened international uncertainty, challenging the established “safe haven” narrative for both assets.

The rising oil price above $80 a barrel has also coincided with Bitcoin’s sideways movement below $65,000. This suggests that energy market shocks could still impact the crypto asset’s upside, preventing it from acting as a complete hedge.

Decoupling and the road ahead for Bitcoin ETFs

Analyst Joao Wedson has observed a significant breakdown in Bitcoin’s correlation with the iShares Expanded Tech Software Sector ETF (BATS:IGV) since late 2025. Wedson views this as a positive development, aligning Bitcoin closer to Satoshi Nakamoto’s original vision of an asset independent of traditional financial markets.

Balchunas remains bullish on the long-term trajectory, projecting that Bitcoin ETFs could potentially triple the AUM of gold ETFs within the next three to five years if the current growth pace continues. He attributes this aggressive growth forecast to enhanced brokerage access, which simplifies Bitcoin investment by removing complexities like private key management.

The path forward for the Bitcoin ETF market will likely involve periods of significant correction and recovery, similar to gold’s history. This institutionalization exposes Bitcoin to broader market sentiment and macro pressures, requiring a long-term perspective from investors.

The resilience of existing holders and continued positive long-term holder sentiment provides a robust foundation for future growth. However, the market’s sensitivity to global events like geopolitical tensions and oil prices underscores Bitcoin’s evolving role in the financial system, a dynamic investors must understand as the crypto market continues to mature.