Bitcoin ETFs See Record Inflows while Gold ETFs Bleed, Liquidity Rotation in Play

UTC by Bhushan Akolkar · 3 min read
Bitcoin ETFs See Record Inflows while Gold ETFs Bleed, Liquidity Rotation in Play
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While BlackRock’s Gold ETF has registered major outflows in 2024, its Bitcoin ETF stands tall at first place with $4.8 billion in flows so far in 2024.

The launch of the Bitcoin ETFs at the beginning of this year has stirred massive capital rotation in some of the world’s biggest asset classes. Also, in contrast to the net inflows of the spot Bitcoin ETFs, Gold ETFs have lost billions since the start of the year.

On Wednesday, February 14, Bloomberg intelligence analyst Eric Balchunas noted that the 14 Gold ETFs have registered net outflows of $2.4 billion to date, in 2024. Only three gold-related exchange-traded funds (ETFs) experienced minor inflows: FT Vest Gold Strategy Target Income ETF, VanEck Merk Gold Shares, and ProShares UltraShort Gold. Among the gold-related ETFs, BlackRock’s iShares Gold Trust Micro and iShares Gold Trust registered notable outflows of $230.4 million and $423.6 million respectively.

Conversely, the ten spot Bitcoin ETFs approved saw substantial aggregate inflows of $3.89 billion and record volume since their introduction on January 11, as per data from Farside.

Popular Bitcoin analyst Jameson Lopp recently shared a chart comparing the performance of gold and Bitcoin exchange-traded funds (ETFs), prompting questions about the sentiments of gold investor and Bitcoin critic Peter Schiff.

The divergence between the two assets has further increased by the declining gold prices witnessed in 2024. Gold has experienced a decrease of 3.4% since the beginning of the year, reaching a two-month low of $1,993 per ounce on February 14th. In contrast, Bitcoin price has surged by 23.5% during the same period, reaching a two-year high of $52,483 on February 14th.

In a report released earlier this month, the World Gold Council noted that gold’s subdued performance is due to significant outflows from global gold ETFs and a decrease in speculative positions.

Bitcoin ETF Inflows Spike This Week

Spot Bitcoin exchange-traded funds (ETFs) have seen a massive surge in net inflows over the past four days. The total inflows in this week have surpassed the entire first four weeks of trading.

According to data from the Bitcoin tracking platform Apollo, the 10 spot Bitcoin ETFs have attracted 43,300 Bitcoin in inflows over the last four days alone. This is equivalent to $2.3 billion at current Bitcoin price. In comparison, it took these funds 20 days of trading to accumulate 42,000 Bitcoin in inflows.

This uptick in inflows has propelled four spot Bitcoin ETFs, excluding Grayscale, into the “billionaire club”. The Bitwise Bitcoin ETF was the latest addition to this club on February 14. Nate Geraci, president of the ETF store, hailed Bitwise’s performance as the most impressive, noting that it stands out as the only crypto-native investment fund among the top providers.

Bitwise joined BlackRock’s iShares Bitcoin Trust, Fidelity’s Wise Origin Bitcoin Trust, and Cathie Wood’s Ark 21Shares Bitcoin Trust in achieving billion-dollar status.

On the other hand, WisdomTree’s Bitcoin Trust has struggled to attract meaningful inflows. It’s among the last standing Bitcoin ETFs, with AUM as little as $23 million.

Funds & ETFs, Market News, News
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