Gold ETFs have once again established superiority over Bitcoin ETFs. The sharp drop in Bitcoin prices and significant fund outflows have steered investors towards gold, resulting in the gold ETFs recording their largest inflows in recent years. The precious metal broke records by surpassing the $3,000 mark with a historic rally. The steep rise in gold prices and withdrawals from Bitcoin ETFs redirected investor interest towards precious metals. Bitcoin prices dropped by 19% in the last three months while gold gained 12.5% in value. This caused gold exchange-traded funds (ETFs) to surpass Bitcoin ETFs in terms of managed assets.
RECORD INFLUX INTO GOLD ETFs The Bitcoin ETFs, which garnered significant interest in the United States since their launch in January last year, are facing substantial outflows by 2024. According to Farside Investors data, a total of $3.8 billion has been withdrawn from Bitcoin ETFs since February 24. In the same period, gold ETFs saw their highest monthly inflows since March 2022, as per data from the World Gold Council.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, noted on social media that these flows indicate that gold ETFs have “regained asset dominance over Bitcoin ETFs.” Balchunas believes investors are turning to gold – a traditional safe haven – in light of market uncertainties and global economic risks.
LOSING ITS LEAD Bitcoin ETFs listed in the U.S. experienced a surge after Donald Trump’s victory in the presidential elections in December 2024, overshadowing gold ETFs in terms of assets under management. However, recent volatility and investors’ tendency to avoid risks accelerated the outflows from Bitcoin ETFs.
CROSSING THE $3,000 MARK FOR THE FIRST TIME Gold’s rise is not restricted to the ETF market alone. This precious metal broke a historic record this week by surpassing the $3,000 per ounce mark for the first time. April gold futures also crossed the $3,000 level early in the week. This indicates that investors are continuing to turn to gold as a safe haven amidst increasing global uncertainties.