Gold ETFs Winning the Asset Race With Bitcoin Funds–for Now

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Gold Exchange-Traded Funds Regain Lead in Assets Under Management

Gold exchange-traded funds (ETFs) in the United States have regained the lead in assets under management, surpassing Bitcoin ETFs. This comes after a brief period where Bitcoin ETFs took the top spot due to the cryptocurrency’s record high and a recent slump.

Gold ETFs Lead in Assets Under Management

According to VettaFi data, American ETFs that provide exposure to gold’s price are collectively managing close to $150 billion in assets. This is a significant increase from the $93 billion in assets managed by the 11 Bitcoin ETFs approved by the Securities and Exchange Commission (SEC) last year.

Bitcoin ETFs’ Brief Rise to Power

In December, Bitcoin ETFs briefly overtook their gold counterparts, thanks to the cryptocurrency’s price increase following the election of U.S. President Donald Trump. His policies were widely expected to boost the digital asset industry, leading to a surge in price. However, Bitcoin’s price has since lost ground and is currently trading around $84,000, down about 25% from its record high.

Gold’s Safe-Haven Status

Gold’s price has been boosted by investors seeking a safe-haven asset due to the new president’s trade war. Gold is a traditional safe-haven asset favored during periods of economic turbulence, and its price has hit a record of $3,014 per ounce.

Bitcoin’s Volatility

Bitcoin has largely traded similarly to tech stocks and other risk-on assets over the past year. However, some experts argue that it has some safe-haven qualities, but it’s also behaved more like a risk asset, leading to outflows in spot ETFs.

Market Outlook

The new Bitcoin ETFs smashed expectations last year, collecting over $3 billion in net flows just one month after they started trading. However, macroeconomic uncertainties and traders concerned about Trump’s policies have led to massive outflows this year, pushing the price of Bitcoin down.

Conclusion

Gold exchange-traded funds have regained the lead in assets under management, surpassing Bitcoin ETFs. This is due to gold’s safe-haven status and its price increase, while Bitcoin’s price has lost ground. The market outlook for Bitcoin is uncertain, with some experts predicting it will continue to behave like a risk asset, while others believe it has the potential to be a hot sauce and outperform gold in the long term.

FAQs

Q: What is the current market situation for gold and Bitcoin?
A: Gold’s price has hit a record of $3,014 per ounce, while Bitcoin’s price is currently trading around $84,000, down about 25% from its record high.

Q: Why has Gold regained the lead in assets under management?
A: Gold’s safe-haven status and its price increase have led to an increase in demand, while Bitcoin’s price has lost ground due to macroeconomic uncertainties and traders’ concerns about Trump’s policies.

Q: What is the outlook for Bitcoin?
A: Some experts believe Bitcoin will continue to behave like a risk asset, while others predict it will outperform gold in the long term.