Bitcoin ETFs Triumph as Gold ETFs Suffer Major Investment Outflow in 2024
Summary:
Exchange-traded funds (ETFs) tracking gold have experienced substantial outflows of $2.4 billion this year, in contrast to Bitcoin ETFs, which saw aggregate inflows of $3.89 billion. The diversion has been worsened by falling gold prices in 2024, down to $1,993 per ounce, while Bitcoin prices have grown by 23.5%, reaching a two-year high of $52,483. Bloomberg's senior commodity strategist predicted gold to perform better than Bitcoin in 2024, but current trends suggest the contrary.
Exchange-traded funds (ETFs) fixated on gold have experienced sizable outflows to the tune of billions this year, presenting a stark difference when compared to ETFs mirroring the real-time value of Bitcoin, referred to as the spot price. Unprecedented outflows of $2.4 billion have been recorded from the top 14 gold ETFs this year, as per information provided by Bloomberg intelligence analyst Eric Balchunas on February 14th.
By contrast, only three have witnessed minor inflows in 2024, namely VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold. The majority of the exodus occurred from BlackRock's iShares Gold Trust Micro and iShares Gold Trust, which shed $230.4 million and $423.6 million respectively.
On the other hand, the spot Bitcoin ETF market tells a different story with the ten approved funds witnessing an aggregated increase of $3.89 billion in 2024. These figures, still preliminary, were obtained from Farside and were realized in tandem with record transaction volumes.
“Bitcoin is attracting increasing amounts of investment capital, while gold-based ETFs are seeing their Assets Under Management (AUM) cut down at an alarming rate,” observed portfolio manager "Bitcoin Munger". Despite this trend, Balchunas remarked that he did not perceive gold ETF investors to be significantly transitioning over to Bitcoin ETFs, but instead, experiencing a bout of "Fear Of Missing Out" (FOMO) related to US equities. Bitcoin pioneer Jameson Lopp, in turn, shared a chart examining the performance of both types of ETFs, questioning the health of gold investor and Bitcoin skeptic Peter Schiff.
Falling gold prices in 2024 have exacerbated this difference. The metal has dropped 3.4% since the start of the year, sinking to a two-month low of $1,993 per ounce on Feb. 14. In contrast, Bitcoin's value has grown by 23.5% within the same time frame reaching a two-year high of $52,483 on Feb. 14.
Earlier in the month, the World Gold Council attributed the poor performance of gold largely to the global gold ETF outflows and a "decrease in speculative positioning." Also listed as contributing factors were "Long-term Treasuries and the US dollar, due to the strong upward trend of US economic surprises."
In January, Mike McGlone, Bloomberg's senior commodity strategist, made a prediction that gold would have a better performance than Bitcoin in 2024. However, the current scenario seems to suggest otherwise. Both gold and Bitcoin are common choices for investors seeking value security, particularly during tense economic and geopolitical circumstances.
Published At
2/15/2024 7:50:43 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.