Enter Bitcoin ETFs, exit gold ETFs

While both gold and bitcoin prices have reached record levels, demand for exchange-traded funds (ETFs), two investment vehicles seen as stores of value and used as a hedge against inflation, has recently diverged. According to data compiled by Bloomberg Intelligence, gold ETFs have seen an outflow of approximately $4.6 billion this year. The 10 Bitcoin ETFs that began trading in January have recorded a net inflow of approximately $8 billion. “The strong performance has ensured that both Bitcoin and large-cap stock ETFs have seen steady inflows from investors who see little to worry about for now. Bitcoin ETFs have gained 35 percent, while the S&P 500 Index has gained 7.6 percent this year. Conversely, the more limited rise in spot gold prices has caused gold ETFs to record outflows for the ninth consecutive week,” BI analysts Eric Balchunas and Andre Yapp said in an assessment published on Tuesday. Meanwhile, Bitcoin rose to a record for the first time in more than two years. Bitcoin, which rose 2.5% to $69,191.95 at one point, fell to $59,317.16, down 14% from the record, as investors sold to take profits. “Given that almost everyone who bought Bitcoin is now making a profit, there’s a good chance we’ll see some profit-taking,” said Zaheer Ebtikar, founder of crypto fund Split Capital.