Gold ETFs Bleed $2.4B as Bitcoin ETFs Surge: Is the Dawn of Digital Gold Upon Us?

• This year, ETFs tracking the price of gold have lost $2.4 billion in outflows as the price of gold dipped, while Bitcoin spot ETFs, which launched last month, scooped up over $4 billion.
• With the two assets being closely compared for a decade, some believe we could be in the era of digital gold as investors switch to Bitcoin amid a 23% price rise.

Since the turn of the year, exchange-traded products tracking the price of gold have lost billions of dollars as investors turn to other assets, new data has revealed. Meanwhile, Bitcoin spot ETFs, which launched last month, have recorded close to $4 billion in aggregate inflows as investors usher in the era of digital gold.

Since Jan. 1, the top 14 gold ETFs have lost $2.394 billion, Bloomberg’s senior ETF analyst Eric Balchunas revealed.

Meanwhile it’s a pretty bad scene right now in the gold ETFs category… via @SirYappityyapp in our just published weekly flow note pic.twitter.com/C0T17JZpiA

— Eric Balchunas (@EricBalchunas) February 14, 2024

BlackRock, which is setting new records in the Bitcoin ETF race, has recorded the biggest outflow in the gold EFT sector. Its iShares Gold Trust has shed $423.6 million, while its iShares Gold Trust Micro has lost $230.4 million. ETFs from other providers, including Invesco, State Street, and Goldman Sachs, have seen smaller outflows. VanEck’s Merk Gold Shares had the highest gain at a measly $16.1 million.

Gold has had a tough start to the year, with an ounce of the world’s most valuable asset trading below $2,000 for the first time in two months.

The Era of the Digital Gold—Is Bitcoin Taking Over?

As the price of gold dips and its ETFs hemorrhage, the Bitcoin community has quickly pointed out that gold’s dominance is ending, and it’s now time for digital gold.

As Bitcoin ‘OG’ and renowned blockchain developer Jameson Lopp pointed out on X, the gold and Bitcoin ETFs have been on two completely opposite paths since mid-last month.

Gold and Bitcoin have been intertwined for years. While it was launched to be electronic cash, Bitcoin has developed a life of its own as a digital alternative to gold. This relationship is slowly morphing into rivalry, and with the launch of the spot ETFs, the competition between the two will only heat up.

Bitcoin has had the upper hand this year. Since its ten spot ETFs launched last month, they have recorded net inflows of $4.11 billion. This is despite Grayscale’s GBTC dampening the market and skewing the data with its outsized outflows, especially in the first ten days.

BlackRock still tops the charts at $4.843 billion, with Fidelity keeping pace with its Wall Street rival at $3.43 billion. Ark Invest became the third Bitcoin ETF to hit the billion-dollar mark, and as of Feb. 14, its assets under management were at 1.095 billion. Meanwhile, Grayscale has recorded a staggering $6.6 billion in outflows.

In contrast to gold, Bitcoin has been on an uptrend in recent weeks. At press time, Bitcoin trades at $51,990, the highest it has traded since November 2021. In the past month, BTC has gained 22.65%, with the spot ETFs among the most significant factors behind the surge.