Investing in gold through bitcoin has become more affordable than ever

before. Most recently launched spot bitcoin exchange-traded funds (ETFs) have lower fees compared to the largest gold ETF, making them a cost-effective option for investing in a gold-like asset. Gold and bitcoin are often considered safe-haven assets. With the introduction of bitcoin ETFs, investors now have an even more economical means of investing in a digital version of gold. These ETFs charge lower fees to investors, with only one exception, when compared to the largest gold ETF.

In a surprising turn of events, bitcoin (BTC) has become more accessible with the introduction of bitcoin ETFs last month. The popular GLD, the largest gold ETF, has an expense ratio of 0.4% - a measure of the fees charged to investors. Interestingly, all but one of the recently approved bitcoin ETFs have a lower expense ratio, with Grayscale's GBTC being the exception. This rapid development has caught many off guard, as digital gold has swiftly become a more affordable alternative to traditional gold. "The speed at which this occurred was completely unexpected," remarked Nate Geraci posted on X., President of ETF Store.

Gold, the traditional form of the precious metal, is often seen as a safe haven for investors who want to protect their assets from the unpredictable fluctuations of financial markets. While there are other options available, such as art, collectibles, real estate, and music royalties, gold is generally considered easier to purchase. With just a single ounce of gold valued at approximately $2,000, even a small amount can go a long way in securing one's savings. Additionally, gold-backed exchange-traded funds (ETFs) require minimal physical space as they exist as digital data within brokerage systems. On the other hand, Bitcoin is increasingly regarded as a modern store of value. Bitcoin ETFs, which offer investors relatively low fees, provide an even more cost-effective hedge. As of January 11, ten issuers have introduced Bitcoin ETFs, with Franklin Templeton charging the lowest management fee of 0.19% among all issuers. Most fees are below 0.30%. In comparison, the largest gold ETF, the SPDR Gold Trust, charges 0.40%. While some investors draw parallels between gold and Bitcoin due to certain similarities, such as their role as stores of value, there are significant differences between the two. Matt Hougan, the Chief Investment Officer at Bitwise, one of the Bitcoin ETF issuers, explains that gold has the advantage of a longer history, but Bitcoin surpasses it in terms of ease of storage, transferability, divisibility, and utility. Furthermore, Bitcoin is more difficult to counterfeit compared to gold.

Is bitcoin more promising than gold in terms of its potential?

The value of Bitcoin stems from its limited supply of 21 million coins, rendering it a scarce asset akin to gold. Additionally, Bitcoin operates independently and is impervious to government influence, much like the precious metal.

Austin Alexander, co-founder of LayerTwo Labs, a venture dedicated to advancing bitcoin, describes bitcoin as the digital equivalent of super gold. According to him, bitcoin possesses all the qualities of gold but in a superior manner. It is not only more scarce, but also more durable and more transmissible than traditional gold.