Bitcoin ETF Market Blossoms While Gold ETFs Hemorrhage Assets At “Alarming Rate”

Updated: 15 February 2024

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Gold-tracking exchange-traded funds (ETFs) have lost billions in outflows in 2024, while spot Bitcoin ETFs have collectively seen a substantial inflows since their launch in the US on Jan. 11.

“Not only is Bitcoin sucking up funds, but gold is hemorrhaging AUM at an alarming rate across many ETFs,” commented portfolio manager Bitcoin Munger.

Bitcoin ETF Inflows Approach $4B As Gold ETFs Suffer In 2024

The 14 leading gold ETFs have seen outflows of $2.4 billion so far in 2024, said Bloomberg Intelligence analyst Eric Balchunas in a Feb. 14 X post. This is in stark contrast to the 10 approved spot Bitcoin ETFs, which have seen aggregate inflows of $3.89 million so far this year, according to preliminary data from Farside.

Meanwhile it’s a pretty bad scene right now in the gold ETFs category… via @SirYappityyapp in our just published weekly flow note pic.twitter.com/C0T17JZpiA

— Eric Balchunas (@EricBalchunas) February 14, 2024

VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF and Proshares UltraShort Gold were the only gold ETFs that had minor inflows this year. BlackRock’s iShares Gold Trust Micro and iShares Gold Trust recorded the highest outflows of $230.4 million and $423.6 million, respectively.

BTC Price Surges As Gold Slumps To A Two-Month Low

In addition to the shift in flows, the gold price has also dropped, while the Bitcoin price has been in a bullish trend since the beginning of this year. Gold has lost 3.4% since the start of 2024, and plunged to a two-month low of $1,993 per ounce on Feb. 14.

Bitcoin, on the other hand, has surged more than 23.5% during the same period, and was able to reach a two-year high of $52,483 on the same day.

Global gold ETF outflows and a “reduction in speculative positioning” were major contributors to gold’s lackluster performance, said the World Gold Council in a Feb. 7 report.

“Added to this was the headwind of higher Treasury yields and the US dollar as US economic strength sharply surprised to the upside, and hopes of early monetary policy cuts were dashed,” it said.

In November, ARK Investment Management‘s Cathie Wood said Bitcoin is a better deflation hedge than gold or cash.

“Bitcoin is a hedge against both inflation and deflation because there’s no counterparty risk, and institutions are barely involved,” said Wood, speaking on Bloomberg’s “Merryn Talks Money“ podcast. “It’s digital gold.”