tl;dr
Bitcoin ETFs in the U.S. have seen inflows exceeding $3 billion over the past five trading days, while gold ETFs experienced $1 billion in outflows. The $4 billion gap between Bitcoin and gold ETF flows is the largest since the U.S. presidential election week in November. Analysts attribute Bitcoin’...
Bitcoin ETFs in the U.S. have attracted over $3 billion in inflows across five trading days, contrasting sharply with gold ETFs, which saw $1 billion in outflows. This $4 billion differential marks the largest gap since the U.S. presidential election week in November.
Analysts suggest this trend reflects a strategic shift away from U.S. assets, driven by rising U.S. Treasury yields and declining foreign demand for long-term Treasurys. Bitcoin is emerging as a preferred decentralized hedge against financial system risks, while gold's appeal diminishes amid easing U.S.-China trade tensions.
Standard Chartered forecasts sustained Bitcoin demand, projecting a price of $120,000 by the end of Q2 and $200,000 by year-end. Despite a minor 0.3% dip to $94,979 today, Bitcoin continues to outperform much of the broader cryptocurrency market, which has fallen 2%.
Standard Chartered analyst Geoffrey Kendrick notes that Bitcoin’s role as a hedge against strategic asset reallocation is underscored by the U.S. Treasury term premium hitting a 12-year high. In contrast, gold mainly serves as protection against geopolitical risks, which have eased recently thanks to progress in U.S.-China trade relations.
Market sentiment indicates investors are increasingly favoring non-U.S. assets, driving ETF flows into Bitcoin. This shift coincides with subdued foreign demand for 30-year Treasurys, pressuring traditional safe havens. Kendrick emphasizes that Bitcoin’s decentralized nature makes it resilient against systemic financial issues, such as public or private sector shocks.
Looking ahead, the current momentum in Bitcoin ETFs is expected to persist through Q2 and beyond, potentially setting new price records. Investors should consider how ongoing economic policy concerns and financial market risks continue to influence asset allocation decisions between traditional commodities like gold and innovative instruments like Bitcoin.