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Unlike exchange-traded funds (ETFs) that track Bitcoin, ETFs that track gold have seen significant outflows this year.
On February 14, Bloomberg Intelligence analyst Eric Balchunas revealed that gold ETFs in the top 14 rankings had seen a combined outflow of $2.4 billion since January.
Gold ETFs see outflows of $2.4 billion
BlackRock's iShares Gold Trust Micro and iShares Gold Trust experienced significant capital outflows, with a loss of $230.4 million and $423.6 million, respectively. These capital outflows coincided with a 3.4% decline in gold prices since the start of the year, hitting a two-month low of $1,993 per ounce on February 14.
In the meantime, things are pretty bad right now in the gold ETF category… via @SirYappityyapp in our weekly flow note which has just been published pic.twitter.com/C0T17JZpiA
– Eric Balchunas (@EricBalchunas) February 14, 2024
Only a few prominent gold ETFs deviated from this trend, with VanEck Merk Gold Stock, FT Vest Gold Strategy Target Income ETF and Proshares UltraShort Gold seeing minor inflows.
According to a study conducted by the World Gold Council dated February 7, this downward trend contributed to a 2% drop in total assets under management (AUM), falling to $210 billion, and a decline of 1% of gold prices at that time.
Meanwhile, according to Lookonchain data, Bitcoin ETFs have generated significant inflows, accumulating a total of 705,566 BTC this year across nine approved funds.
February 14 update:#iShares(#Black rock) added 10,003 $BTC($518 million) today and currently holds 105,280 $BTC($5.45 billion).
8 ETFs added 14,104 $BTC($730.3 million) and #Shades of grey decreased 1,912 $BTC($99 million). pic.twitter.com/x9AfKy036e
– Lookonchain (@lookonchain) February 14, 2024
On February 14 alone, ETF inflows totaled $631 million, with BlackRock's ETF hitting the $5 billion mark. The price of Bitcoin also saw a surge, jumping 23.5% over the same period, reaching a two-year high of $52,483 on February 14.
Analysts speak out
Portfolio manager “Bitcoin Munger” highlighted the significant shift in investment preferences, highlighting the appeal of BTC as well as the substantial AUM losses experienced by gold ETFs.
However, analysts like Balchunas have cautioned against interpreting this as a mass migration from gold to Bitcoin, attributing it to fear of missing out (FOMO) in the US stock market.
Bitcoin pioneer Jameson Lopp, meanwhile, shared a chart comparing the performance of the two ETFs, asking about the status of gold advocate and Bitcoin skeptic Peter Schiff.
Can anyone do a health check @PeterSchiff? pic.twitter.com/mUc2xGwK2j
–Jameson Lopp (@lopp) February 14, 2024
Earlier this month, the World Gold Council highlighted global gold ETF outflows, citing a reduction in speculative positioning and headwinds from long-term Treasuries and the U.S. dollar as contributing factors to the lackluster performance of gold.
These developments contradict the predictions of Mike McGlone, chief commodities strategist at Bloomberg, who anticipated gold outperforms Bitcoin in 2024.
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