The mixture of annual outflows from gold exchange-traded funds (ETFs) and vital inflows into ETFs raises questions on whether or not traders are diverting their funds from treasured metals to the world’s largest cryptocurrency.
Pushed by sturdy curiosity in spot bitcoin ETFs, BTC funds have seen inflows of $10.6 billion thus far this yr, in comparison with outflows of $7.6 billion for bodily gold ETFs.
Nevertheless, JPMorgan strategists imagine this isn’t a case of traders transferring funds from gold to bitcoin.
“We disagree and as a substitute imagine that personal traders and people have promoted each gold and bitcoin for the reason that begin of the yr, quite than transferring from the previous to the latter,” the analysts stated in a notice.
Evaluation of ETF flows alone can supply a deceptive perspective, doubtlessly underestimating particular person and personal traders’ acquisition of gold by way of bullion and cash whereas overestimating their funding in Bitcoin.
JPMorgan strategists highlighted a notable pattern of retail traders transferring away from holding bitcoins in digital wallets “towards the comfort and regulatory safety of recent spot bitcoin ETFs.”
“Along with retail traders, speculative institutional traders comparable to hedge funds, together with momentum merchants comparable to CTAs, additionally seem to have fueled the rally by shopping for each gold and bitcoin futures since February, maybe much more strongly than retail traders,” the analysts wrote.
