Gold-tracking exchange-traded funds (ETFs) in 2024 have witnessed significant outflows, amounting to billions, in stark contrast to ETFs tracking the spot price of Bitcoin.
As per an X post from Bloomberg intelligence analyst Eric Balchunas on Feb. 14, the foremost gold ETFs have encountered outflows totaling $2.4 billion thus far in 2024.
Only three among them have experienced marginal inflows this year: VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold.
Notably, the most substantial outflows emanated from BlackRock’s iShares Gold Trust Micro and iShares Gold Trust, with $230.4 million and $423.6 million exiting, respectively.
Conversely, the ten sanctioned spot Bitcoin ETFs have garnered cumulative inflows of $3.89 billion and registered unprecedented volume since their inception on Jan. 11, according to preliminary data from Farside.
Commenting on the trend, portfolio manager Bitcoin Munger remarked, “Not only is Bitcoin sucking up funds, but gold is hemorrhaging AUM at an alarming rate across many ETFs.”
Balchunas, however, opined that the migration of gold ETF investors to Bitcoin ETFs wasn’t necessarily prevalent, suggesting it could be attributed to “US equity FOMO” instead.
Bitcoin pioneer Jameson Lopp shared a chart comparing the performance of the two ETFs, raising questions about the stance of gold investor and Bitcoin detractor Peter Schiff.
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The disparity has been exacerbated by the decline in gold prices throughout 2024. The precious metal has depreciated by 3.4% since the year’s commencement, reaching a two-month low of $1,993 per ounce on Feb. 14.
Meanwhile, Bitcoin prices have surged by 23.5% over the same period, hitting a two-year high of $52,483 on Feb. 14.
In a report released earlier in February, the World Gold Council highlighted global gold ETF outflows and a “reduction in speculative positioning” as significant factors contributing to gold’s subdued performance.
It also noted that “Long-term Treasuries and the US dollar, on the back of strong upside US economic surprises, were also headwinds.”
While Bloomberg senior commodity strategist Mike McGlone had previously forecasted gold outperforming Bitcoin in 2024, current observations suggest otherwise.
Bitcoin and gold, often compared for their shared store of value attributes, have historically been favoured investments during economic and geopolitical uncertainties.
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