In 2024, exchange-traded funds (ETFs) tracking gold experienced significant outflows, contrasting sharply with ETFs tracking the spot price of Bitcoin. According to a February 14 post by Bloomberg Intelligence analyst Eric Balchunas, outflows from 14 major gold ETFs have totaled $2.4 billion thus far in the year. Only three funds, including VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold, saw modest inflows during this period. Notably, BlackRock's iShares Gold Trust Micro and iShares Gold Trust witnessed substantial outflows of $230.4 million and $423.6 million, respectively.
On the contrary, preliminary data from Farside reveals that approved spot Bitcoin ETFs have experienced total inflows of $3.89 billion since their launch on January 11, accompanied by record trading volumes. Portfolio manager Bitcoin Munger remarked that the capital influx isn't exclusive to Bitcoin but also highlights a significant loss of assets under management (AUM) in many gold ETFs.
However, Balchunas suggests that the movement of gold ETF investors into Bitcoin ETFs may not occur en masse, but rather as a result of Fear of Missing Out (FOMO) in the U.S. stock market. This divergence is further emphasized by the declining prices of gold in 2024, with the commodity witnessing a 3.4% decrease since the beginning of the year, reaching a two-month low of $1,993 per ounce on February 14.
In contrast, Bitcoin prices have surged by 23.5% during the same period, reaching a two-year high of $52,483 on February 14. The World Gold Council attributed gold's lackluster performance in early February to outflows from global gold ETFs and reduced speculative positioning, compounded by headwinds from long-term Treasuries and the strengthening U.S. economy.
Despite earlier predictions by Bloomberg senior commodities strategist Mike McGlone that gold would outperform Bitcoin in 2024, the current market dynamics suggest a different trajectory. Both Bitcoin and gold are frequently compared for their shared attributes as stores of value and preferred investments during times of economic and geopolitical uncertainty.
