Bitcoin ETFs lose $5.5 billion in outflows in five weeks as investors pour into gold

Spot bitcoin ETFs celebrated their first birthday in January, and while investors initially poured millions into them, the enthusiasm is fizzling. Some firms are even deciding to shed some crypto ETFs amid a broader tepid crypto market.

Gold and bitcoin (and by extension, gold and bitcoin ETFs) are often pitted against each other in an age-old debate about which asset is a better inflation hedge. With worries around inflation, recession, tariffs, and potential rate hikes, the debate is back. What’s more, the postelection crypto craze and the slew of pro-crypto steps the administration has taken have failed to sustain the initial optimism.

Bitcoin ETFs have seen significant outflows recently, with Bloomberg reporting the funds “recorded their longest run of weekly net outflows since listing in January last year.” Investors pulled over $5.5 billion in total over the past five weeks.

Gold ETFs, meanwhile, have reclaimed the crown as holding the most assets under management between the two. Some of those bitcoin ETF outflows have also rotated right into the shiny metal funds.

The numbers speak for themselves. On Election Day, spot bitcoin ETFs’ assets under management stood at about $53 billion. These funds saw huge wins in the months that followed, with nearly $10 billion in inflows during the one month following the election and major gains in bitcoin’s price. On Inauguration Day, BTC rose to an all-time high of $109,114, boosting bitcoin ETFs’ AUM to about $123 billion. As of today, the funds’ totals are down to $95 billion and bitcoin’s price seems stuck around $83,000.

Meanwhile, gold ETFs totaled more than $167 billion in assets under management as of March 15. The price of gold has hit record highs lately, breaking the $3,000 an ounce mark last week.

Put simply: gold is up 13.3% in the past three months, while bitcoin is down 21% over the same time period. 

Todd Ruoff, CEO of Autonomys, said that the surge in gold ETFs is due to heightened geopolitical tensions and economic uncertainties, prompting investors to seek the asset’s stability.

He added that some analysts caution that the same factors could sink the price of bitcoin to $73,000.

“This volatility has led to notable outflows from bitcoin ETFs, further widening the gap between gold and bitcoin ETFs,” Ruoff said. “These developments highlight a broader market trend where investors gravitate toward traditional safe-haven assets like gold in response to economic and geopolitical uncertainties.”

Against this backdrop, 21Shares said it would liquidate two bitcoin futures and ethereum futures ETFs on March 28, due to a “routine review... and a maturing digital assets landscape.”