Bitcoin-ETFs Flourish While Gold ETFs Lose Money
Date: 2024-02-15 Author: Dima Zakharov Categories: CRYPTO PAYMENTS
Bitcoin Surges as Gold Declines
In the financial landscape of 2024, a notable phenomenon has emerged: while traditional gold Exchange-Traded Funds (ETFs) are experiencing substantial outflows, Bitcoin ETFs are witnessing significant inflows. According to Bloomberg analyst Eric Balchunas, outflows from 14 leading gold ETFs amounted to a staggering $2.4 billion this year.
Shift in Investment Patterns
The most significant outflows were observed from Blackrock’s iShares Gold Trust Micro and iShares Gold Trust, losing $230.4 million and $423.6 million respectively. Conversely, data from British investment firm Farside reveals a combined inflow of $4.1 billion into 10 Bitcoin ETFs.
Bitcoin's Ascendancy
Portfolio manager Bitcoin Munger remarked, "Not only is Bitcoin absorbing funds, but gold is also losing assets at an alarming rate across many ETFs." This sentiment was echoed by Bitcoin enthusiast Jameson Lopp, who shared a comparison chart of the two ETFs, questioning the stance of prominent gold investor Peter Schiff.
Diverging Fortunes
The divergence is exacerbated by the decline in gold prices in 2024, with the precious metal losing 3.4% since the beginning of the year, plummeting to a two-month low of $1,993 on February 14. In contrast, Bitcoin has surged by 24.5% since the year's commencement, reaching a two-year high of $52,500 on February 14.
Challenges for Gold
The World Gold Council attributed the weak performance of gold to the outflows from global gold ETFs and the "reduction in speculative positions," alongside the resilience of long-dated US Treasuries and the US dollar amidst favorable economic surprises in the US.
Ongoing Debate
In January, senior commodity analyst Mike McGlone predicted that gold would outperform Bitcoin in 2024, a forecast yet to materialize. The ongoing comparison between Bitcoin and gold stems from their shared role as a store of value and a safe haven investment during economic and geopolitical uncertainties.
