Fixed supply + institutional mania—after Bitcoin crashes 50%, will it replicate the explosive market surge of gold from 20 years ago?

Written by: Forbes

Compiled by: AididiaoJP, Foresight News

In 2026, Bitcoin has had a particularly tough time. It failed to hold on to last year’s all-time high, which briefly broke above $126k. Despite multiple rounds of positive signals from US President Trump, Bitcoin’s price has still fallen by more than 50% cumulatively since October last year. However, multiple analysts said a potential policy shift by the Federal Reserve may be brewing a turnaround.

Just as BlackRock CEO Larry Fink’s latest 12-month Bitcoin price prediction was making the rounds, Bloomberg Intelligence senior ETF analyst Eric Balchunas offered a highly referential comparison: the “mirror” path of Bitcoin’s price action is likely to follow the “triumphs and pains” journey of gold over the past 20-plus years.

Balchunas wrote on X: “The 22-year history of gold ETFs may be the closest roadmap provided for Bitcoin ETF investors.” Since the launch of gold ETFs in 2004, gold prices have continued to surge, and its total market value is now approaching $2.8 trillion. This figure alone is enough to spark market imagination—if Bitcoin can replicate part of gold’s successful path, its potential upside would be extremely substantial.

He added: “Both gold and Bitcoin are packaged value stores that don’t generate returns. They don’t produce cash flow, and the core driver of price depends entirely on investor sentiment, rather than traditional stock earnings power, bond coupon rates, or government credit backing.”

Over the past 20-plus years, gold ETFs have experienced dramatic ups and downs: they briefly became the world’s largest ETF in 2011, then fell into a prolonged period of stagnation lasting eight years, before struggling to bounce back. Balchunas believes Bitcoin ETFs are playing out a similar script—“astonishing gains, painful pullbacks, and a recovery phase that requires extremely strong patience to get through.” Notably, each gold ETF cycle lifted the prior historical highs, which is especially encouraging for long-term Bitcoin holders.

Looking back at the development of Bitcoin ETFs: in early 2024, after more than a decade of persistent push from the crypto community, spot Bitcoin ETFs were finally approved to list on the market. Wall Street institutions rushed in, and several leading funds quickly became among the fastest-growing ETF products in history. This not only marked Bitcoin’s move from a fringe asset into the mainstream financial system, but also set the stage for future price volatility.

However, volatility has always moved alongside it. Earlier this month, analysts at the Bitfinex exchange warned that if there were “shock” large-scale outflows of ETF funds, it could directly interrupt the current rebound momentum. Bitcoin has already rebounded nearly 10% from the early-July low below $57k, but the market remains highly cautious.

As the absolute leader in the Bitcoin ETF space, BlackRock’s IBIT fund has recently sold nearly 100k BTC in the past few months to respond to redemption pressure. It still holds more than 733k BTC, with assets under management approaching $126k. This also reflects, indirectly, the flow characteristics of institutional capital—both in and out can trigger significant market reactions.

Although Bitcoin’s price has pulled back sharply this year, many long-term bulls remain highly confident. They generally believe Bitcoin is poised to enjoy long-term prosperity comparable to gold. Balchunas himself also emphasized the “spiritual parallel” between the two: “Gold went viral quickly back then; in one day in 2011, it surpassed SPY, the world’s largest ETF, and then fell out of favor for many years. IBIT similarly surged to a $100 billion asset peak within a single day—that was exactly the top in October 2025. Supply for both is nearly fixed. When demand concentrates and explodes, it’s easy to trigger a price explosion. But the problem is that demand is often unpredictable, coming like waves rather than steadily and continuously.”

From the perspective of a veteran observer in the crypto industry, this comparison is highly realistic. Gold anchors long-term value thanks to scarcity, safe-haven attributes, and global recognition; Bitcoin, meanwhile, exhibits similar “digital gold” characteristics through the halving mechanism, a decentralized network, and increasingly strong institutional adoption. The introduction of ETFs further lowers the holding threshold—traditional investors can gain exposure without directly holding Bitcoin, which undoubtedly amplifies demand elasticity.

At present, the market still holds an optimistic view on the resilience of ETF demand. Simon-Peter Massabni, Head of Business Development at XS.com, pointed out: “Institutional demand remains one of the most solid pillars for Bitcoin. Spot Bitcoin ETFs continue to record stable net inflows of funds, while more and more companies are also starting to include digital assets in portfolio diversification strategies. This institutional interest effectively offsets the selling pressure seen in the recent market pullback.”

Looking ahead, Bitcoin’s trajectory will be heavily influenced by the macro environment, regulatory developments, and institutional behavior. Gold’s market value has already climbed to nearly the $2.8 trillion level. If Bitcoin can gradually occupy a similar “store of value” position, even reaching only a fraction of gold’s market value, it would bring extremely attractive appreciation potential. Of course, the process must come with severe volatility—this is precisely the essence of “high risk, high reward” in the crypto market.

For ordinary investors, the key is to stay rational, diversify risk, and focus on long-term trends rather than short-term noise. Bitcoin’s story is far from over. As more traditional capital enters and infrastructure improves, this “price explosion” prologue may only be just starting. From gold to Bitcoin: fixed supply + institutional frenzy—will it replay an “explosive” price行情?