Gold ETFs have surged ahead of Bitcoin as market sentiment shifts towards safe-haven assets amid historic upturn, with gold prices exceeding $3,000 per ounce for the first time ever.
Gold ETFs Overtake Bitcoin ETFs Amid Historic Rally
Bitcoin has dropped 19% over three months, while gold is up 12.5%. The decline in bitcoin‘s value has led to significant outflows from its exchange-traded funds (ETFs), which have lost about $3.8 billion since February 24 of this year.
Gold is a highly valued precious metal, prized for its rarity and versatility.
It has been used as currency, jewelry, and in electronics for centuries.
With a density of 19.3 g/cm³, gold is one of the densest elements on Earth.
Its high thermal conductivity makes it useful in dentistry and other applications.
The largest producer of gold is China, accounting for over 12% of global production.
A Shift Away from Volatility
In contrast, ‘gold ETFs have seen their largest monthly inflows since March 2022 last month’ , according to the World Gold Council. This shift in investor sentiment is driven by market volatility and geopolitical uncertainty, which have been fueling the price of ‘a safe-haven asset’ . As demand for a safe-haven asset continues to grow, investors are turning away from volatile cryptocurrencies like bitcoin.
The Asset Crown Reclaimed
Gold ETFs have now reclaimed the asset crown over bitcoin ETFs, according to Bloomberg Senior ETF analyst Eric Balchunas. Spot bitcoin ETFs listed in the US first surpassed gold ETFs in assets under management in December 2024, but that trend has reversed. The significant outflows from bitcoin ETFs and inflows into gold ETFs have pushed gold ahead of bitcoin.
A Historic Rally
Gold has been seeing a significant run, exceeding $3,000 per ounce for the first time ever this Friday. ‘Gold futures for April delivery broke through the same level earlier in the week’ , driven by market volatility and geopolitical uncertainty. The price of gold continues to rise as demand for a safe haven grows.
Market Outlook
While the trend may reverse, investors are currently shifting away from volatile cryptocurrencies like bitcoin towards traditional safe-haven assets like gold. As market conditions continue to evolve, it will be interesting to see how this trend plays out and whether gold ETFs remain ahead of bitcoin ETFs in terms of assets under management.
Bitcoin is a decentralized digital currency that allows for peer-to-peer transactions without the need for intermediaries.
Created in 2009 by an anonymous individual using the pseudonym Satoshi Nakamoto, it uses cryptography to secure and verify transactions.
The total supply of bitcoin is capped at 21 million, making it a scarce asset.
Bitcoin's value is determined by market forces, with prices fluctuating based on demand and supply.
