Bitcoin Spot ETF Inflows Rise as Gold-Backed Funds See Outflows
Bitcoin spot exchange-traded funds (ETFs) have witnessed a surge in inflows, leading to concerns that the world’s most valuable cryptocurrency could overtake gold as the primary store-of-value. Analysts have emphasized the growing significance of these new ETF flows for bitcoin’s overall performance.
Year-to-date net flows into global bitcoin ETFs and products have shown a substantial increase, particularly since the beginning of February, according to data from ETC Group. On Thursday alone, ETF inflows amounted to $389.55 million, overshadowing the $168 million outflow. Experts predict that bitcoin’s exchange-traded product (ETP) and ETF market cap might surpass that of gold within the next two years due to potential price appreciation.
André Dragosch, ETC Group’s Head of Research, stated that there is an increasing divergence between fund flows into bitcoin and those into gold, indicating that bitcoin could be on track to overshadow gold as the primary store-of-value. The majority of new investments in bitcoin appear to be related to investments in U.S.-based ETFs, contributing to this growing trend. Notably, outflows from Grayscale’s converted GBTC fund have slowed down since the end of January, which has also contributed to the shift in fundflows.
In recent weeks, BlackRock’s iShares Bitcoin ETF has attracted the largest share of inflows, amassing $224.3 million on a single day. Conversely, gold has experienced an increase in net negative flows since the start of the year across spot bitcoin ETFs and global ETPs from Canada, Europe, and Asia, according to ETC Group data.
Ryze Labs analysts confirmed that gold ETFs have seen significant outflows of $2.4 billion this year, while the top ten bitcoin ETFs have collectively received $3.89 billion in inflows. This pattern strengthens their belief that bitcoin is both a “risk-on” investment and a reliable safe-haven asset, and they expect it to outperform gold in varying market conditions.
André Dragosch expressed confidence in bitcoin’s potential to ultimately disrupt gold as the prime store-of-value. However, he highlighted that the current market cap of global gold ETPs is three times larger than that of bitcoin’s ETP and ETF combined.
At the time of writing, bitcoin was trading at $52,357, and the GM 30 Index, comprising the top 30 cryptocurrencies, showed a 1.72% decline in the past 24 hours, reaching 114.39.
*Note: This article is based on the opinions and analyses of experts and should not be regarded as financial advice.*
Analyst comment
Positive news: Bitcoin spot ETFs are experiencing a surge in inflows, potentially leading to bitcoin overtaking gold as the primary store-of-value. Experts predict that bitcoin’s ETP and ETF market cap could surpass that of gold within the next two years. The majority of new investments in bitcoin are related to U.S.-based ETFs. Gold ETFs, on the other hand, have seen significant outflows this year.
As an analyst, I expect the market to continue favoring bitcoin over gold in the near future, potentially leading to increased demand and price appreciation for bitcoin.
