By Michael Scott
Market analysts are reporting increased inflows into the Bitcoin exchange-traded funds (ETFs) in a trend perceived to rival gold as the primary store-of-value. The Bitcoin price has already rallied by 10% in the seven-day run, as illustrated in CoinGecko data.
The ETC Group reports huge inflows into the Bitcoin ETFs globally. The inflow extends to the recently approved Bitcoin ETFs in the US.
The substantial inflows could become a long-term trend. Such consistency could threaten dislodging gold from its position as the primary store-of-value globally.
US-based Spot ETFs Dominate Investment Inflows
The ETC Group research chief André Dragosch indicated that global funds flow to gold and bitcoin have apparent divergence. The executive added that such portrays potential signs for Bitcoin gradually stealing the gold’s crown as the preferred store-of-value.
Dragosch explained that most new investments flowing into Bitcoin reveal links to the investments destined for the US-based ETFs. He added that such trends affirm the increasing importance of the newly approved ETFs in attracting flows critical to bolstering Bitcoin’s overall performance.
The ETC Group data illustrates that the year-to-date net flows destined to the global Bitcoin exchange-traded products (ETPs) portray a substantial increase since the onset of February.
The observed trend partly arises from the slowdown witnessed in Grayscale’s outflows that began after its conversion from trust to GBTC fund. A review of Block’s Data Dashboard affirms the declaration with GBTC that started in late January to 72.83 million by February 14.
Further scrutiny of the Block’s data shows that Thursday’s activity had ETF inflows of $389.55 million against a $168 million outflow.
The past week saw BlackRock’s iShares Bitcoin ETF (IBIT) realize the largest inflow, with receipts testing $224.3 million on Thursday, February 15.
The ETC Group data shows that global ETPs based in Asia, Europe and Canada, alongside the US spot ETFs, realized higher net inflows. A comparative analysis of gold ETFs shows increased net negative flows that trace to the onset 2024.
Bitcoin Integrates Risk on Investment and Worthy Store-of-value
Ryze Labs analysts echo the view of the ETC Group that the 14 top-ranked gold ETFs have suffered massive outflows since the onset of 2024. The analysts report a whopping $2.4 billion, while the ten Bitcoin ETFs collectively received $3.89 billion in inflows.
The trend reinforces the investors’ confidence in Bitcoin executing a dual role as a dependable safe-haven asset besides the risk-on investment. The Ryze Labs analysts expressed optimism that Bitcoin would outperform gold in the two conditions.
Dragosch is optimistic that the trend would replicate in the long term, with the outcome being Bitcoin disrupting gold as the main store of value.
The ETC Group’s executive acknowledged that the current market capitalization for the Bitcoin-based ETPs and ETFs is still a third of the global gold ETPs. He added that the viability of Bitcoin-based ETPs leapfrogging gold would take two years via price appreciation.
Bitcoin Market Performance
The deceleration realized in Grayscale outflows has seen the Bitcoin price rally strongly to test above $52,300. At press time 07:19 UTC, Bitcoin is exchanging hands at $51,943.83, being 0.9% down in the past 24 hours.
The decline is mild as the Bitcoin rally in the fortnight remains a healthy 21.6% while the monthly uptrend tops 25%.
Despite the slip, Bitcoin still commands a $1.019 trillion market capitalization with a daily trading volume of $20.941 billion, as per CoinGecko data. Such represents a 5.20% increase in volume, signalling a rise in market activity.
With the seven-day run showing a 4% increase, Bitcoin is underperforming the global crypto market, which is up 6.70%. Nonetheless, Block’s GM 30 Index, which tracks the top 30-ranked cryptos, slipped by 0.21% to 114.46 at 07:29:43 UTC.
The GM 30 Index is 54.70% from the all-time high. The index illustrates a snapshot of the crypto market’s core strength and its key drivers.