U.S. gold exchange-traded funds are once again leading the pack in assets under management, having been momentarily surpassed by the newly introduced Bitcoin ETFs. This shift comes as the historically stable asset sees a surge to a record peak while BTC experiences a downturn.
As per VettaFi data, American ETFs that provide exposure to gold are currently managing nearly $150 billion in total assets. Meanwhile, the 11 Bitcoin ETFs—approved by the SEC last year—have amassed over $93 billion in managed assets.
In December, Bitcoin ETFs temporarily surpassed their gold alternatives, according to K33 Research, largely due to a spike in the cryptocurrency’s price following the election of U.S. President Donald Trump, whose policies were anticipated to benefit the digital asset sector.
Bitcoin peaked at nearly $109,000 in January on the day of his inauguration. However, it has gradually declined and is currently trading around $84,000, reflecting a 25% drop from that all-time high.
As of Friday, Bitcoin’s value aligns with gold, which has recently surged to $3,014 per ounce as investors, concerned about the new president’s trade war, seek out more stable investments. Gold is traditionally regarded as a safe haven during economically turbulent times.
Over the past year, Bitcoin has largely exhibited trading patterns similar to tech stocks and other risk-oriented assets.
“Bitcoin possesses some safe haven attributes, yet its recent behavior resembles that of a high-risk asset, which has led to increased outflows from those spot ETFs,” said Kent Thune, Senior Content Editor at etf.com, who oversees the publication’s research. He emphasized gold’s role as an inflation hedge and a safe-haven investment in the “current environment.”
The recent Bitcoin ETFs exceeded expectations following their approval, attracting new capital from investors previously unable to access the crypto market. The funds collectively crossed $3 billion in net flows just one month after launch, surpassing the initial reception of gold ETFs two decades ago.
However, ongoing macroeconomic uncertainties and traders’ worries about Trump’s policies, including tariffs on favored trading partners, have resulted in significant outflows this year, contributing to the decline in Bitcoin’s value.
Despite this, Bloomberg ETF analyst Eric Balchunas believes the trend may soon shift, asserting that Bitcoin is the real “hot sauce.”
“It’s not truly indicative of customer interest,” he remarked, suggesting that gold’s resurgence compared to Bitcoin is merely a function of “the market.”
“The average investor generally seeks stocks, bonds, and speculative opportunities. Thus, to me, gold isn’t ‘hot sauce.’ The perceived potential of Bitcoin as ‘hot sauce’ has kept it competitive with gold over the past year, despite gold’s upward trajectory.”
“I firmly believe gold will never be ‘hot sauce,’” he concluded, indicating that while gold may currently hold an advantage, Bitcoin could ultimately prevail in the medium to long term.
Edited by James Rubin
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