The ETF market shows evidence that investors are pulling capital from the precious metal and moving it to bitcoin. Bitcoin (BTC) exchange-traded funds (ETFs) in the United States have recorded massive capital inflows in the last five weeks, attracting more than USD 9 billion, led by BlackRock Inc.'s iShares Bitcoin Trust (IBIT). This comes as money is leaving gold-backed ETFs.
According to market data, gold-backed ETFs have faced notable outflows in those same five weeks, which have exceeded USD 2.8 billion. This behavior reflects a shift in investor preferences, who are reallocating resources from the precious metal to digital currency, in a context of increasing acceptance of bitcoin as a hedge asset, according to financial market analyst Christopher Wood.
An example of this is that May consolidated as the third month with the highest capital flow towards these ETFs in the last year, with a monthly net flow of USD 5.85 billion. This indicator, which measures the difference between purchases and sales of assets in the ETFs, is only below the USD 6.03 billion recorded in January 2024 and the USD 6.049 billion from November of the same year, according to data from SosoValue.
Bitcoin is gaining ground
Analysts interpret this market rotation as a sign that BTC is gaining ground as a legitimate hedge in investment portfolios. Wood, global equity strategist at Jefferies, told Bloomberg: "I remain bullish on both gold and bitcoin. Both are the best hedges against currency debasement in the G7 world."
The perception of BTC as an alternative safe haven is growing, especially in an environment of uncertainty in the United States, where concerns about economic stability and the debt crisis have driven the search for non-traditional assets.