New Safe-Haven? Bitcoin Inflows Are Outpacing Gold Inflows
Bitcoin has witnessed unprecedented inflows, surpassing those of gold, as investors channel billions into Bitcoin Spot Exchange-Traded Funds (ETFs) in the United States.
This surge in investment has propelled Bitcoin’s market capitalization beyond the $1 trillion mark for the first time since November 2021, as of February 14, 2023. The cryptocurrency now challenges gold’s longstanding status as a premier safe-haven asset, with potential implications for gold’s market value.
Bitcoin ETFs in the US have together seen over $3 billion in net inflows in roughly a month into their launch, a milestone that took gold ETFs two years to achieve.
Despite capital shifts from Grayscale Bitcoin Trust, Bitcoin ETFs’ success signals a growing competition with gold. Bitcoin’s market cap now represents 15% of all sound monetary assets, marking a shift in investor preference toward digital currencies.
This trend is underscored by a contrasting movement in gold investments, with gold-backed ETFs experiencing net outflows of $2.39 billion since the beginning of 2024, while Bitcoin ETFs have attracted over $4 billion in the same period, suggesting what could be a reevaluation of traditional and digital assets in the safe-haven market.
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