Gold ETFs Reclaim Lead Over Bitcoin ETFs

Gold exchange-traded funds (ETFs) in the U.S. have regained their position as the leading assets under management after briefly being surpassed by the new American Bitcoin ETFs. This shift was influenced by gold’s surge to a record high and Bitcoin’s recent downturn.

According to VettaFi data, American ETFs that offer exposure to gold’s price manage nearly $150 billion in assets, while the 11 Bitcoin ETFs approved by the SEC last year manage over $93 billion.

In December, Bitcoin ETFs had momentarily overtaken gold ETFs due to a price surge in Bitcoin, attributed to policies from President Donald Trump that were anticipated to support the digital asset industry. Bitcoin reached an all-time high of nearly $109,000 on the day of the inauguration. However, its value has since dropped to around $84,000, marking a 25% decline from the peak.

As Bitcoin’s price fell, gold reached a historical high of $3,014 per ounce. Investors, spooked by the new president’s trade policies, often gravitate towards gold as a safe-haven asset during economic uncertainty. Unlike gold, Bitcoin has recently behaved more like a risk asset, resulting in withdrawals from spot ETFs, as noted by Kent Thune, Senior Content Editor at ETF.com. Thune emphasized gold’s role as a hedge against inflation in the current economic climate.

The approval of new Bitcoin ETFs resulted in unexpected inflows, with nearly $3 billion in net flows recorded just a month post-launch, outpacing the launch of gold ETFs two decades prior. However, concerns around Trump’s policies and macroeconomic uncertainties have led to significant outflows this year, affecting Bitcoin’s price.

Yet, Bloomberg ETF analyst Eric Balchunas suggests this trend may reverse, pointing out Bitcoin’s potential appeal as a speculative investment. He commented that while gold has recently outperformed, Bitcoin could ultimately prove more valuable in the long term, stating that “gold can never be hot sauce” in terms of investment excitement.

Edited by James Rubin