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Is gold ETF money flowing into Bitcoin? Is BTC digital gold or a risky asset?

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Is gold ETF money flowing into Bitcoin? Is BTC digital gold or a risky asset?

Gold may be losing its luster in the eyes of investors, as the ETF of this oldest and most reliable wealth storage method globally is experiencing significant capital outflows in 2024, while the newly listed spot Bitcoin ETF continues to see rising funds. Where did the money flow to in 2024? Is BTC truly digital gold or a risky asset?

Gold ETF Funds See $3.16 Billion Outflow This Year

Bloomberg ETF analyst Eric Balchunas pointed out in an article published on 2/14 that a total of $3.16 billion has flowed out of gold ETF funds in 2024. Among the 14 gold ETFs, only 3 saw net inflows, with the largest GLD SPDR Gold Shares experiencing an outflow of up to $2.4 billion.

Meanwhile, Bitcoin spot ETF has seen 14 consecutive days of net inflows. Could it be that the funds flowing out of gold have all moved to Bitcoin spot ETFs?

Bitcoin ETF achieves 14 consecutive days of net inflows, BlackRock and Bitwise assets closely following GBTC

ETF Funds Inflow Rankings

Balchunas previously released the ranking of ETFs with the highest funds inflow this year on 2/13. Among them, BlackRock's Bitcoin spot ETF IBIT ranked fourth, with a total inflow of $4.7 billion as of 2/13. The top three are:

  • IVV iShares Core S&P 500 ETF: representing the U.S. S&P 500 Index, with a total inflow of $13 billion year-to-date
  • VOO Vanguard S&P 500 ETF: representing the U.S. S&P 500 Index, with a total inflow of $12.7 billion year-to-date
  • QQQ Invesco Nasdaq 100 ETF: representing the Nasdaq 100 Index, with a total inflow of $5.6 billion year-to-date

It seems that besides flowing into Bitcoin spot ETFs, a significant portion of the $3.16 billion outflow from gold ETF funds has also gone into ETFs related to the U.S. stock market!

Is Bitcoin Digital Gold or a Risk Asset?

We also compared the performance of various ETFs year-to-date. The top three ETFs representing U.S. large-cap stocks all have gains of over 6%, with IBIT at 5.65%, while gold has a negative return, falling by 3.02% year-to-date.

Comparing the return rate of IBIT seems a bit distorted, as IBIT was only listed on 1/11. If we compare it with Bitcoin's year-to-date return rate of 23.7%, Bitcoin is the most outstanding high-risk asset this year.

It seems quite obvious whether Bitcoin is a hedge against inflation or a high-risk, high-return asset.