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Gold ETFs Decline by $2.4 Billion in 2024 as Bitcoin ETFs Hit Record Volumes

In 2024, leading gold ETFs have faced a $2.39 billion outflow amid declining spot gold prices. Gold Exchange Traded Funds (ETFs) have lost billions in 2024, in contrast to Bitcoin cash ETFs, according to a Bloomberg Intelligence post by analyst Eric Balchunas on February 14th. Fourteen gold ETFs have seen $2.4 billion in outflows so far in 2024, with only three experiencing minor inflows: VanEck Merk Gold shares, FT Vest Gold Strategy Income ETF, and UltraShort ProShares Gold, with the largest outflows being from iShares Gold Trust Micro and iShares Gold Trust BlackRock, losing $230.4 million and $423.6 million, respectively.

On the flip side, according to preliminary data from Farside, 10 approved spot Bitcoin ETFs have seen total inflows of $3.89 billion and unprecedented volumes since their launch on January 11th. Bitcoin manager states that not only is Bitcoin attracting capital, but gold is rapidly losing AUM in many ETFs. However, Balchunas mentioned that he doesn’t believe gold ETF investors are necessarily migrating to Bitcoin ETFs but rather to the FOMO of U.S. stocks.

Bitcoin pioneer Jameson Lopp shared a chart comparing the two ETFs, questioning the health of gold investors and Bitcoin skeptic Peter Schiff. This divergence has been exacerbated by the decline in gold prices in 2024, with the commodity losing 3.4% since the start of the year and falling to a two-month low of $1993 per ounce on February 14th. Meanwhile, Bitcoin’s price increased by 23.5% over the same period, reaching a two-year high of $52,483 on February 14th. In a February report, the World Gold Council stated that global gold ETF outflows and a decrease in speculative positioning are primary reasons for gold’s poor performance, adding that long-term U.S. Treasuries and the strong U.S. dollar also acted as headwinds due to U.S. economic surprises.

In January, Bloomberg Senior Commodity Strategist Mike McGlone predicted gold would outperform Bitcoin in 2024, but this seems to be far from expectations at the moment. Bitcoin and gold are often compared due to their common value storage and selection as investments during economic and geopolitical turmoil.

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