Bitcoin spot ETF inflows increase amid net outflows from gold-backed funds
One analyst said significant inflows into global Bitcoin exchange-traded products, including the recently approved US exchange-traded fund, could threaten gold’s position in the long term.
According to André Dragosch, head of research at ETC Group, there is a growing gap between global fund flows into Bitcoin and their equivalents in gold. “This could be an early sign of Bitcoin stealing the gold crown as a major store of value,” Dragosch told The Block.
The analyst added that most of the new investments in Bitcoin appear to be related to investments in US-based ETFs. “New ETF flows are increasingly important to Bitcoin’s overall performance,” he said.
Data from ETC Group shows a significant increase in net inflows into global Bitcoin exchange-traded funds and products since early February. The observed trend is partly due to the recent slowdown in outflows from Grayscale’s GBTC convertible fund. The Block’s data dashboard shows a decline in GBTC outflows since the last week of January.
According to The Block dataETF inflows last Thursday totaled $389.55 million, while outflows totaled $168 million. BlackRock’s iShares last week Bitcoin 
BTC
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ETF (IBIT) received the most inflows, attracting $224.3 million on Thursday alone.
Net inflows into gold have increased since the beginning of the year compared to net inflows into spot Bitcoin ETFs and global ETPs in Canada, Europe and Asia, according to ETC Group data.
Bitcoin combines a ‘risky’ investment with a store of value.
Analysts at Ryze Labs have a similar view to what ETC Group observed, noting that “since the beginning of the year, the top 14 gold ETFs have experienced significant outflows of $2.4 billion, while in stark contrast the 10 leading Bitcoin ETFs have attracted a total of $3.89 billion in inflows.”
“These trends strengthen our confidence in Bitcoin’s dual role as a ‘risk investment’ and a trusted safe-haven asset,” Ryze Labs analysts said in an email. “We believe Bitcoin will outperform gold in both market conditions. “I continue to believe in it,” he said. I sent it to The Block.
Dragosch expects this trend to continue in the long term, with the ultimate expectation that “Bitcoin will ultimately disrupt gold as a primary store of value.”
However, the ETC Group research director emphasized that the current market capitalization of global gold ETPs is approximately three times the combined market capitalization of Bitcoin ETPs and ETFs. He added, “In this respect, Bitcoin’s ETP and ETF market capitalization is likely to surpass gold in the next two years through price increases.”
The largest digital asset by market capitalization was trading at $52,357 at 6:45 a.m. ET, according to The Block’s pricing page. The GM 30 index, which represents the top 30 cryptocurrencies, fell 1.72% to 114.39 over the past 24 hours.
Bitcoin price is up more than 1% in the last 24 hours. Image: Block.
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