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February 15, 2024Gold ETFs bleed $2.4B so far this year as Bitcoin ETFs hit record volumes
Gold-tracking exchange-traded funds (ETFs) have experienced substantial outflows this year, amounting to billions of dollars. Bloomberg intelligence analyst Eric Balchunas reported on Feb. 14 that the leading 14 gold ETFs have collectively lost $2.4 billion in outflows. Only three ETFs have seen minor inflows, while the largest outflows were recorded by BlackRock’s iShares Gold Trust Micro and iShares Gold Trust, losing $230.4 million and $423.6 million, respectively.
Bitcoin ETF Inflows:
In contrast, approved spot Bitcoin ETFs have witnessed significant inflows totaling $3.89 billion this year, according to preliminary data from Farside, alongside record-breaking volumes.
Portfolio manager “Bitcoin Munger” noted, “Not only is Bitcoin sucking up funds, but gold is hemorrhaging AUM at an alarming rate across many ETFs.”
Eric Balchunas suggested that gold ETF investors might not necessarily be migrating en masse to Bitcoin ETFs, but rather succumbing to “US equity FOMO.”
Asset Performance Comparison:
The divergence in ETF flows is further highlighted by the contrasting performance of gold and Bitcoin. Gold prices have declined by 3.4% since the beginning of the year, reaching a two-month low of $1,993 per ounce on Feb. 14. In contrast, Bitcoin prices have surged by 23.5% over the same period, hitting a two-year high of $52,483 on Feb. 14.
Contributing Factors:
The World Gold Council attributed gold’s lackluster performance to global gold ETF outflows and a reduction in speculative positioning. Long-term Treasuries and the US dollar, driven by strong upside US economic surprises, also served as headwinds.
Despite earlier predictions by Bloomberg senior commodity strategist Mike McGlone that gold would outperform Bitcoin in 2024, the current trends indicate a different reality.
Both gold and Bitcoin are often compared for their shared store of value properties and their status as go-to investments during economic and geopolitical turmoil.
