Listed gold-based funds have seen a significant outflow this year, while ETFs tracking the price of Bitcoin (BTC) have seen a significant surge. According to Eric Balchunas, a Bloomberg intelligence analyst, leading gold ETFs have seen an inflow of $2.4 billion in 2024.
This year, only three gold ETFs, VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF and Proshares UltraShort Gold, boast modest asset growth. The iShares Gold Trust Micro and iShares Gold Trust produced losses of $230.4 million and $423.6 million, respectively, resulting in the largest outflows.
This difference in sentiment underscores investors’ growing preference for Bitcoin as an investment vehicle compared to gold. Some speculate that as a result of fear of missing out(FOMO), outflows from gold ETFs are affecting U.S. stocks rather than Bitcoin ETFs.
This discrepancy will be exacerbated by the 2024 decline in gold prices. The commodity has seen a 3.4% year-to-date decline, reaching its lowest level in two months at $1, 993 per ounce on February 14. Conversely, Bitcoin prices rose 23.5% over the same period. On the same day, they reached their highest level in two years at $52,483.
In a recent report, the World Gold Council pointed to a reduction in speculative positions and an outflow of global gold ETFs as reasons for gold’s underperformance. In addition, as a result of positive economic surprises in the United States, the strength of the U.S. dollar and long-term Treasury bonds have been extremely successful.
In times of economic and geopolitical uncertainty, gold and Bitcoin are often considered safe assets. The current trend points to a different outcome, although Mike McGlone, senior commodities strategist at Bloomberg, initially predicted that gold would outperform Bitcoin in 2024. The shift in investor sentiment toward digital assets is evident in the preference for Bitcoin due to its greater profit potential.
on February 12, some $493.4 million, or about 10,280 BTC, flowed into Bitcoin ETFs. Among them, BlackRock’s IBIT attracted a massive $374.7 million. Ark 21Shares’ ARKB fund earned $40 million, and Fidelity’s FBTC fund earned a substantial $151.9 million.
Notwithstanding these significant inflows, a small outflow of $95 million from Grayscale and $20.8 million from BTCO Invesco resulted in a net inflow of nearly half a billion dollars. In contrast, Bitcoin miners produced about 1,059 BTC on the same day, representing about $51 million, a mere 10% of the total amount of BTC raised by ETFs.
on February 9, a similar trend was observed: ETFs took in about 12,700 BTC worth a staggering $541.5 million, while mining brought in just 980 BTC worth about $45 million.
