As Bitcoin spot ETFs "rake in cash," gold ETFs

Iti9

Price performance is also one of the factors driving related fund flows, with gold prices dropping over 2% year-to-date, while Bitcoin has surged 23% this year.

Since the launch of newly issued Bitcoin spot ETFs on January 11th, they have attracted billions of dollars in inflows. However, during the same period, there has also been a significant outflow of funds from gold ETFs. This inevitably leads one to think of Bitcoin as a "modern investment alternative" to gold.

In terms of assets under management (AUM), the two largest gold ETFs, SPDR Gold Shares (GLD) and iShares Gold Trust (IAU), have experienced net outflows. These funds had AUMs of $58 billion and $26 billion, respectively, at the beginning of the year.

According to data from ETF.com, from January 11th to February 14th, investors withdrew approximately $2.6 billion from the SPDR Gold Shares (GLD) ETF and $507 million from the iShares Gold Trust (IAU).

This contrasts sharply with the same period last year when both funds experienced steady inflows, with SPDR Gold Shares attracting $241 million and iShares Gold Trust attracting $86 million.

However, since the beginning of this year, 11 out of the 14 gold ETFs listed on ETF.com have experienced net outflows.

In comparison, the two largest newly issued Bitcoin spot ETFs (excluding Grayscale's GBTC, which has long existed as a closed-end fund), namely BlackRock's IBIT and Fidelity's FBTC, have collectively attracted and managed assets approaching $10 billion since January. Including outflows from GBTC, Bitcoin spot ETFs have seen a net inflow of approximately $5 billion.

Eric Balchunas, a senior ETF analyst at Bloomberg, posted on the social platform X, stating, "It's pretty bad for gold ETFs right now. It's clear that these people aren't going to Bitcoin ETFs."

However, he later adopted a more ambiguous attitude, suggesting that "part of the reason" for the outflow from gold ETFs might be investors turning to Bitcoin ETFs.

Nevertheless, price performance is certainly one of the factors driving related fund flows. Gold prices have dropped over 2% year-to-date, while Bitcoin has surged 23% this year.

Bitcoin is often compared to gold because both are considered by investors as hedge assets against inflation. However, since Bitcoin is still a relatively new form of currency (compared to gold's history of over 5,000 years), people outside the cryptocurrency industry have found it challenging to invest in Bitcoin. However, the situation has changed with the launch of ten Bitcoin spot ETFs by issuers.

Jafar224

Outflows are also quite normal.

Kapil334

Bitcoin has potential, it's even more impressive than gold.