Investors Return to Gold... $4.8bn ‘Ebb’ From Bitcoin ETFs in Three Months

Bitcoin (BTC) slid to its lowest level in two months as large-scale outflows from spot exchange-traded funds (ETFs) weighed on the market. With geopolitical uncertainty rising, investor money is shifting into traditional safe-haven assets such as gold, fueling analysis that cracks are emerging in Bitcoin’s long-touted “digital gold” narrative.

According to Bloomberg on the 29th (local time), the 12 spot Bitcoin ETFs listed in the US stock market have been posting net outflows for three consecutive months. Bloomberg estimates that about $4.8 billion (about 6.7 trillion won) has exited over the period. If the trend continues through the end of this month, it would mark the longest stretch of net outflows since spot ETFs were launched last year.

Against that backdrop, Bitcoin fell as low as $81,118 intraday on Binance’s Tether (USDT) market. That is the weakest level since Nov. 21 last year and more than 34% below the all-time high recorded in October.

The shift in flows is also evident in the competition for safe-haven status. The assets under management of BlackRock’s spot Bitcoin ETF (IBIT), the world’s largest asset manager, were recently overtaken by BlackRock’s gold ETF (IAU). It signals that, in a risk-off environment, investors are choosing gold over Bitcoin.

Alex Kuptsikevich, chief market analyst at FxPro, said “Bitcoin is no longer being viewed as an alternative to fiat currencies or a hedge against fiscal policy in major economies,” adding that “the return to traditional safe-haven assets is clearly visible in times of crisis.”

The divergence is also widening in price action. A gauge that converts Bitcoin’s value relative to the price of gold has plunged about 60% from its peak late last year. It underscores how investors are seeking shelter in gold and precious metals as geopolitical tensions intensify.

Warnings of further declines are also mounting. Adam McCarthy, an analyst at Kaiko Research, said “if the $80,000 level breaks, a move into the $70,000 range cannot be ruled out,” adding that “volatility could increase further in periods of thinning liquidity as the weekend approaches.”

Tony Sycamore, a market analyst at IG Australia, also said “this decline suggests the rebound since November last year was merely a temporary technical bounce,” adding that “Bitcoin appears to have re-entered a downtrend.”