In the last three months, demand for gold-focused exchange-traded funds (ETFs) has skyrocketed, while Bitcoin $83,291 ETFs have seen massive outflows. Gold prices have increased by 12.5%, whereas Bitcoin has experienced a nearly 19% drop. Due to market uncertainties, investors are gravitating towards traditional safe havens.
High Withdrawals from Bitcoin ETFs
Since entering the U.S. market in January 2024, Bitcoin ETFs had attracted significant inflows. However, approximately $3.8 billion in outflows since February 24 indicate a substantial decline in interest towards these funds. The drop in Bitcoin prices is considered one of the primary reasons for these withdrawals.
Spot Bitcoin ETFs listed in the U.S. briefly surpassed gold ETFs in December 2024. However, recent market developments have reversed this trend. Increased volatility, political events, and macroeconomic uncertainties have led investors to prefer assets they perceive as safer over Bitcoin.
Record Investment Flow into Gold ETFs
Demand for gold ETFs has reached unprecedented levels not seen since March 2022. Economic fluctuations and geopolitical tensions have encouraged investors to focus on traditional, safer investment options. Last Friday, gold prices exceeded $3,000 for the first time, reaching a historic level.
Experts attribute the heightened interest in gold to current economic conditions. Bloomberg Senior ETF Analyst Eric Balchunas remarked, “This flow has resulted in gold ETFs surpassing Bitcoin ETFs.” This statement illustrates how market movements directly influence investment preferences.
Due to economic uncertainties, investors are carefully monitoring the balance between risk and safety. While gold maintains its position as a long-term safe haven in the markets, Bitcoin ETFs are losing investor interest due to fluctuating prices.