Why State Street believes cryptocurrency ETFs can outperform precious metals ETFs in North America

Cryptocurrency ETFs show strong growth momentum in North America. Its trading activity continues to rise, attracting a large number of young investors. In contrast, precious metal ETFs have grown relatively stable. Based on market data, State Street saw that the trading volume growth rate of cryptocurrency ETFs far exceeds that of precious metal ETFs, which is the preliminary basis for its belief that the former can surpass the latter.

From the perspective of investment characteristics, cryptocurrency ETFs are highly volatile. Although this feature brings risks, it also contains high return potential. However, precious metal ETFs are relatively stable and have small returns fluctuations. In a high-yield investment environment like North America, the high volatility of cryptocurrency ETFs is more likely to attract investors who pursue stimulus returns, creating conditions for them to surpass precious metal ETFs.

The structure of North American investors has changed. The younger generation of investors is rising and they are highly receptive to emerging things. Cryptocurrency ETFs are an emerging investment tool that meet the preferences of young investors. They are more willing to try investing in the cryptocurrency field to drive inflows of cryptocurrency ETFs. In contrast, precious metal ETFs are less attractive to young investors, and this investor structure difference is conducive to the development of cryptocurrency ETFs.

In terms of market liquidity, the cryptocurrency ETF market is becoming more mature, with more market makers and liquidity significantly improved. It can quickly trade at a more reasonable price during trading, reducing investors' trading costs. The liquidity of precious metal ETFs is relatively slow to improve. Good liquidity enables cryptocurrency ETFs to surpass precious metal ETFs in terms of trading convenience and attract more investors to choose.

Portfolio diversified demand has prompted investors to focus on cryptocurrency ETFs. Cryptocurrencies are low in correlation with traditional assets, and joining a portfolio can diversify risks. In the North American investment market, investors are eager to reduce overall risks through diversification. Cryptocurrency ETFs provide new ways to achieve this goal, while precious metal ETFs have no outstanding advantages in diversification.

Technological innovation promotes the development of cryptocurrency ETFs. The application of blockchain technology makes transaction records more transparent and secure. Investors' confidence in the underlying technology of cryptocurrency ETFs has increased. At the same time, new trading platforms and tools continue to emerge to enhance the investment experience. The precious metal ETFs are relatively lagging behind in technological innovation, which makes cryptocurrency ETFs have an advantage at the technical level.

Financial institutions' participation also affects the development of both. More and more financial institutions are beginning to get involved in the cryptocurrency ETF field. They bring more capital and market attention to cryptocurrency ETFs with their professional resources and customer base. In contrast, financial institutions in the precious metal ETF field have fewer new moves. The active participation of financial institutions has become a strong support for cryptocurrency ETFs to surpass precious metal ETFs.

The regulatory environment is gradually becoming clear. Regulation of cryptocurrency ETFs in some parts of North America tends to be regulated. A clear regulatory framework reduces investor concerns and makes investments more legitimistic and safe. However, the supervision of precious metal ETFs has been stable for a long time and has no obvious changes. The improvement of the regulatory environment injects impetus into the development of cryptocurrency ETFs, helping them surpass precious metal ETFs in market competition.

Media publicity has a huge impact on investors' perceptions. Cryptocurrency ETFs frequently appear in various media reports. The media's publicity of its innovative features and potential benefits has increased its popularity and appeal. A large number of investors are paying attention to and investing in cryptocurrency ETFs due to media reports. In contrast, precious metal ETF media have low exposure, which to some extent affects the performance of both in the market.

Tax policies are also at work. In some parts of North America, cryptocurrency ETF tax policies are relatively flexible. Investors can enjoy tax benefits in certain circumstances. This reduces investment costs and increases real returns. The tax policy of precious metal ETFs is relatively fixed. Differences in tax policies make cryptocurrency ETFs more competitive in terms of cost-benefits, helping them surpass precious metal ETFs.

Popularization of investment education has enabled more investors to understand cryptocurrency ETFs. Financial education institutions and online platforms have carried out related training. Investors learn to master the knowledge and skills of investing in cryptocurrency ETFs. This enhances their confidence and ability to invest. As investment education deepens, more investors are involved in the cryptocurrency ETF market, driving their scale to continue to expand, making it possible to surpass precious metal ETFs.

Cryptocurrency ETF products are constantly enriched. In addition to Bitcoin ETFs, there are also multiple digital currency combination ETFs. Different products meet the diverse needs of investors. Investors can choose suitable products based on their own risk preferences and investment goals. In contrast, the product types of precious metal ETFs are relatively single. Rich product choices gain more market share for cryptocurrency ETFs.

Changes in the macroeconomic environment also affect investment choices. During times of economic instability, investors seek new safe-haven assets. Cryptocurrency ETFs exhibit safe-haven asset characteristics in some cases. Its price fluctuations are not entirely affected by traditional economic factors. This attracts investors seeking asset preservation amid economic turmoil, creating opportunities for them to surpass precious metal ETFs.

Social media communication has accelerated the promotion of cryptocurrency ETFs. Investors share investment experience and opinions on social platforms. Hot topics and discussions attract more attention to cryptocurrency ETFs. The spreading effect of social networks has enabled cryptocurrency ETFs to spread rapidly among the investor community. The precious metal ETF is low on social media and has limited communication range, which further highlights the communication advantages of cryptocurrency ETFs.

Fintech companies help cryptocurrency ETFs grow. They develop convenient investment platforms and analytical tools. Investors can easily buy and sell cryptocurrency ETFs through mobile apps and obtain real-time market data. This convenience improves the investment experience. In contrast, the precious metal ETF investment platform is slightly inferior in convenience and functionality, which makes cryptocurrency ETF surpass precious metal ETFs in terms of investment convenience.

Geopolitical factors also have an impact on both. In some geopolitical tensions, investors tend to choose more flexible investments to avoid risks. Cryptocurrency ETFs are favored by investors in these regions due to their convenient cross-border transactions. However, precious metal ETFs are relatively limited in trading due to geopolitical influence. Geopolitical factors provide opportunities for cryptocurrency ETFs to surpass precious metal ETFs in specific market environments.