Gold Funds See Big Outflows Alongside Rush of Money Into Bitcoin ETFs
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Helene Braun
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Gold ETFs have seen heavy outflows since the 10 spot bitcoin ETFs launched on Jan. 11.
The bitcoin ETFs have seen huge inflows, with the two largest sporting nearly $10 billion in AUM just more than a month after opening.
This doesn’t necessarily mean money is leaving gold for bitcoin.
While the new spot bitcoin ETFs, partly pitched as a modern substitute for investing in gold, have received billions in net inflows since opening for business on Jan. 11, a sizable amount of money has been exiting gold ETFs.
The two largest gold ETFs based on assets under management – the SPDR Gold Shares (GLD), which began 2024 with $58 billion in AUM, and the iShares Gold Trust (IAU), which started the year with $26 billion – have each experienced net outflows.
From Jan. 11 to Feb. 14, investors pulled roughly $2.6 billion out of GLD and about $507 million out of IAU, according to ETF.com.
This is in contrast to the same period a year ago when both funds saw solid inflows, GLD attracting about $241 million and IAU $86 million.
Out of 14 gold ETFs checked on ETF.com, 11 have seen net outflows since the start of the year.
The two largest new spot bitcoin ETFs (not including Grayscale’s GBTC, which already existed as a closed-end fund) – BlackRock’s IBIT and Fidelity’s FBTC – together had garnered just shy of $10 billion of AUM since launching in January. Including outflows at GBTC, the spot ETFs as a group have seen roughly $5 billion in net inflows.
“It’s a pretty bad scene right now in the gold ETFs category,” said Bloomberg Intelligence senior ETF analyst Eric Balchunas in a post on X. “To be sure, I don’t think these people are migrating to bitcoin ETFs,” he wrote, although he said it could partly be a reason for the ugly numbers.
Bitcoin is often compared to gold since both are seen as a haven asset by investors looking to keep their money protected from inflation and that can’t be touched by the government. Because bitcoin is still a relatively new form of money – especially compared to gold which has been around for more than 5,000 years – it was difficult for people outside of the crypto industry to invest in it, but that changed when ten issuers launched spot bitcoin ETFs.
Performance is surely a factor as well. The price of gold is lower by more than 2% thus far in 2024, while bitcoin is higher by 23% year-to-date.
