Is Bitcoin Receiving Outflows from Gold ETFs? Is BTC Digital Gold or a Risk Asset?
Gold may be losing its luster in the eyes of investors as ETFs, the oldest and most reliable form of wealth storage, experienced significant outflows in 2024, while newly listed Bitcoin spot ETFs continued to attract funds. So, where did the funds flow in 2024? Is BTC really digital gold or a risky asset?
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Gold ETFs experienced a $3.16 billion outflow this year
Ranking of ETF fund inflows
Is Bitcoin digital gold or a risky asset?
Bloomberg ETF analyst Eric Balchunas pointed out in an article published on February 14 that gold ETFs saw a total outflow of $3.16 billion in 2024. Among the 14 gold ETFs, only 3 had net inflows, with the largest, GLD (SPDR Gold Shares), experiencing an outflow of up to $2.4 billion.
On the other hand, Bitcoin spot ETFs saw 14 consecutive days of net inflows. Did the funds that flowed out of gold flow into Bitcoin spot ETFs?
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Bitcoin ETF sees 14 consecutive days of net inflows, BlackRock and Bitwise assets closely following GBTC
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Balchunas
previously released a ranking of ETFs with the highest fund inflows this year on February 13. Among them, BlackRock’s Bitcoin spot ETF IBIT ranked fourth, with a total inflow of $4.7 billion as of February 13. The top three were:
IVV (iShares Core S&P 500 ETF): representing the US S&P 500 Index, with a fund inflow of $13 billion year-to-date.
VOO (Vanguard S&P 500 ETF): representing the US S&P 500 Index, with a fund inflow of $12.7 billion year-to-date.
QQQ (Invesco Nasdaq 100 ETF): representing the Nasdaq 100 Index, with a fund inflow of $5.6 billion year-to-date.
Thus, besides Bitcoin spot ETFs, a significant portion of the $3.16 billion outflow from gold ETFs seems to have flowed into US stock market-related ETFs!
We also compared the performance of various ETFs year-to-date. The top three, representing large-cap US stocks, have all had gains of over 6%, while IBIT has had a gain of 5.65%. Gold, on the other hand, has had negative returns, falling 3.02% year-to-date.
Using IBIT’s return rate may distort the comparison a bit, as IBIT was only listed on January 11. If we compare it to Bitcoin’s year-to-date return of 23.7%, Bitcoin is the most eye-catching risky asset this year.
So, whether Bitcoin is an inflation hedge or a substitute for gold, or a high-risk, high-return risky asset, seems quite self-evident.
ETF
GLD
IBIT
Bitcoin
Gold
Further reading:
Bitcoin ETF sees 14 consecutive days of net inflows, BlackRock and Bitwise assets closely following GBTC
CME open interest returns to January peak, Bitcoin rises to $52K, market cap reaches $1 trillion.
