Will Bitcoin become "Gold 2.0"? Or is it more like a speculative meme stock?

Zhitong App has learned that the U.S. Securities and Exchange Commission (SEC) has decided to approve the exchange-traded fund (ETF) for spot Bitcoin trading. This is considered a milestone in expanding the base of cryptocurrency investors.

The approval of the ETF by regulatory authorities should not have been an event that excited investors. However, the speculation surrounding the spot Bitcoin ETF has driven Bitcoin to rise 160% in the past 12 months, and even led to the official X account of the SEC being hacked.

The speculative accumulation prior to the approval of the spot Bitcoin ETF by the SEC is a joy for Wall Street institutions eager to sell ETFs at extremely low prices. It is reported that the fees for spot Bitcoin ETFs are set at around 0.2% to 0.4%, and it is expected to raise up to $4 billion in funds for 11 spot Bitcoin ETFs that are currently being prepared on the first day of listing. Larry Fink, CEO of global asset management giant BlackRock, who once criticized Bitcoin as a "money laundering index," now praises Bitcoin as "digital gold." The acceptance and adoption of Bitcoin by Wall Street has excited cryptocurrency investors.

Those who have been pushing for the approval of spot Bitcoin ETFs for years optimistically believe that Bitcoin is indeed "gold 2.0". Analysts believe that if Bitcoin is increasingly seen as a digital store of value rather than a fintech killer application, then the current price of Bitcoin will have greater room for growth. Cryptocurrency exchange Gemini believes that ETFs are the key to making Bitcoin look like a legitimate destination for $36.7 trillion in savings and retirement cash, similar to the adoption of gold after the first ETF was launched 20 years ago.

However, the view that Bitcoin will change the rules of the game and be adopted like gold seems somewhat exaggerated. The road to "gold 2.0" for Bitcoin appears neither smooth nor shiny. In addition to spot ETFs, there are already many ways to gain exposure to Bitcoin, including stock and futures ETFs. However, in fact, these products often start off successful, then fail, perform poorly, or even shut down, similar to the speculative cycles of the cryptocurrency market. This means that financial advisors may find it difficult to gain support from nervous cryptocurrency investment newcomers.

Jonathan Bier, Chief Investment Officer of Farside Investors, said that the new spot Bitcoin ETF may perform well, but this may be largely due to funds already entering the cryptocurrency market looking for investments that are cheaper or more efficient than the current options. In addition, using Bitcoin as a store of value similar to gold faces a problem. An analysis report released by S&P Global in May last year showed that gold has historically proven to be a hedge against inflation. The report pointed out that since 2003, gold has closely tracked inflation expectations, reaching a level consistent with a causal relationship. A report by Morningstar in August last year also showed that gold is an effective hedge tool during major stock market adjustments. Bitcoin, on the other hand, has not demonstrated these attributes.

Bitcoin certainly has some speculative characteristics similar to gold, such as the inability to generate passive income. However, this does not mean that Bitcoin is a safe asset suitable for retirement cash. The hesitation of the SEC in approving a Bitcoin ETF for spot trading indicates that regulatory gray areas still exist.