Gold has lost some of its luster in the eyes of investors as exchange-traded funds (ETFs) for the world’s oldest and most reliable store of wealth have seen significant outflows in 2024, while inflows into the newly listed spot Bitcoin (BTC) ETFs continue to rise.
As noted in a Wednesday X post from Bloomberg Intelligence senior ETF analyst Eric Balchunas, out of the leading 14 gold ETFs, 11 have recorded outflows totaling more than $3 billion so far in 2024.
The only three products to see inflows include VanEck Merk Gold Shares (NYSE: OUNZ), FT Vest Gold Strategy Target Income ETF (IGLD), and Proshares UltraShort Gold (NYSE: GLL), which increased by a combined $23.1 million. SPDR Gold Shares (NYSE: GLD) was by far the biggest loser, with outflows of nearly $2.4 billion.
In an effort to help readers avoid the assumption that all of the funds pulled from these ETFs were redirected towards the spot BTC ETFs, Balchunas said, “To be sure, I don’t think these are [people] migrating to BTC ETFs (maybe a tiny bit) but rather just us equity FOMO [although] that could reverse given the new eco data.”
With the S&P and Nasdaq recently hitting all-time and yearly highs, Balchunas may have a point, as investors are known to chase profits when prices relentlessly climb higher.
Weekend Review, 2/11: Confirmed Uptrend, 80% to 100% Exposure
Nasdaq and S&P 500 are up 14 of the last 15 weeks.
Nasdaq closed at another two-year high while S&P 500 closed at an all-time high as it cleared 5000.
Distribution Days: 1 - Nasdaq, 3 - S&P 500$SPY $QQQ pic.twitter.com/Vx82c6ngGU— TML Trader (@TMLTrader) February 11, 2024
But the pro-crypto crowd saw the statement as an effort to soften the blow being felt by the precious metals crowd, and staunch anti-Bitcoiners like Peter Schiff, who have shunned Bitcoin (and the gains it has experienced) for years, insisting that it is nothing but a passing fad.
It looks like another classic pump-and-dump is going on with #Bitcoin and the @exchangeETF. The four-day conference kicked-off on Super Bowl Sunday and ends on Valentine's Day. There's a lot of hype surrounding the newly listed #BitcoinETFs. I wonder when the massacre will begin.
— Peter Schiff (@PeterSchiff) February 12, 2024
Jameson Loop, co-founder and CTO of Casa, posted the following chart and jokingly asked, “Can someone do a wellness check on @PeterSchiff.”
Meanwhile, James Butterfill, head of research at CoinShares, said it’s likely that at least some of the outflows from gold ETFs are making their way into the Bitcoin ETFs.
Gold ETP flows haven't been faring well despite positive price action. Data does suggest some of those outflows are finding their way in to Bitcoin ETPs. pic.twitter.com/0W6MHPNM0n
— James Butterfill (@jbutterfill) February 15, 2024
Bringing some balance to the conversation was Lyn Alden, founder of Lyn Alden Investment Strategy, who said, “Gold has an ongoing role as the best analog backup for a digital world, but I would be nervous if I held only gold with no Bitcoin hedge. It’s rough out there, and monies compete with each other.”
Alden followed up that post clarifying that she “wouldn’t want to own Bitcoin and zero real-world assets either. Bitcoin is best for liquid emergent portable money. Property, supplies, and gold for domestic analog stuff. Stocks for growth and income. Bitcoin for global money. Bonds for trading sardines and lolz.”
According to data from Farside, the Bitcoin ETFs have collectively recorded inflows of $340 million on Wednesday, bringing the aggregate total inflows since Jan. 11 to $4.115 billion.
In the time since the Bitcoin ETFs launched, BTC price has climbed from $47,000 to $52,000, an increase of more than 10%. Since Jan. 1, it has increased 23%.
Gold’s trajectory has been the opposite. On Jan. 1, the spot price of gold was around $2,066, and on Jan. 11, it traded at $2,033. At the time of writing, the yellow metal trades at $1,999.80, which means it has declined 3.22% since the start of the year and 1.65% since the launch of the spot BTC ETFs.
