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Gold ETFs Slump Driving Bitcoin (BTC) Price to $60k —Bloomberg Analysts

By:
Ibrahim Ajibade
Published: Feb 27, 2024, 20:27 GMT+00:00

Key Points:

  • Bitcoin (BTC) price soared to a new 2024 peak above $57,300 on Tuesday Feb 27, bringing its monthly gains to 37%.
  • Bloomberg analysts have highlighted how Gold ETFs have recorded significant fund outflows since the launch of Bitcoin ETFs in Jan 2024.
  • BTC ETF inflows continue to rise, possible driving Bitcoin price towards the $60,000 territory.
Gold ETFs Slump Driving Bitcoin (BTC) Price to $60k —Bloomberg Analysts

In this article:

Bitcoin (BTC) price soared to a new 2024 peak above $57,300 on Tuesday Feb 27, bringing its monthly gains to 37%. Bloomberg analysts have highlights are divergence between Bitcoin ETFs and Gold ETFs could trigger further BTC price uptrend.

Recent market trends suggest investors may be redirecting funds from Gold ETFs towards the newly-launched Bitcoin ETFs, supposedly to take advantage of the nascent markets and wider price swings.

Gold ETFs bleed $3B so far in 2024 as BTC ETFs hit record volumes

Leading gold Exchange Traded Fund’s have seen record outflows of nearly $3 billion so far in 2024, coinciding with a 2.4% drop in the price of price of spot gold year-to-date. In comparison Bitcoin price has delivered a blistering 38% growth performance.

According to Bloomberg analysts, this appears to be a result of changes in investors preferneces between Bitcoin ETFs and Gold ETF over the last two months.

Gold ETF Recorded $2.4 billion outlflows in 2024. Source; X/Eric Balchunas/Bloomberg
Gold ETF Recorded $2.4 billion outlflows in 2024. Source; X/Eric Balchunas/Bloomberg

Only three had seen minor inflows in 2024: VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF and Proshares UltraShort Gold.

The most significant gold ETF outflows came from BlackRock’s iShares Gold Trust Micro and iShares Gold Trust, with $230.4 million and $423.6 million exiting, respectively. This is a nod to the broad acceptance of  Blackrock’s iShare BTC ETF which has quickly raced to the top of the Bitcoin ETF holdings.

Meanwhile, the 10 newly-approved spot Bitcoin ETFs have seen aggregate inflows of $3.89 billion and record volume since their launch on Jan. 11, according to data from analytics platform Farside.

“Not only is Bitcoin sucking up funds, but gold is hemorrhaging AUM at an alarming rate across many ETFs,” commented portfolio manager for Bitcoin Munger.

Balchunas, however, commented that he didn’t think gold ETF investors were necessarily mass migrating to Bitcoin ETFs, “but rather just US equity FOMO.”

Bitcoin pioneer Jameson Lopp shared a chart comparing the two ETFs, asking about the well-being of gold investor and Bitcoin detractor Peter Schiff.

Gold ETFs vs. Bitcoin ETFs Netflows - Jan 11 to Feb 27 2024.
Gold ETFs vs. Bitcoin ETFs Netflows – Jan 11 to Feb 27 2024.

The divergence has been exacerbated by falling gold prices in 2024. The commodity has lost 3.4% since the beginning of the year, falling to a two-month low of $1,993 per ounce on Feb. 14.

Bitcoin and gold have often been compared for their shared store of value properties and their choice as go-to investments during times of economic and geopolitical turmoil.

With the exacerbating conflict in the Middle East, Europe, this shuffle could have singficant bullish impact on Bitcoin prices ahead of the widely anticipated US Fed rates cuts.

BTC Price Forecast: $60,000 in March 2024?

With BTC showing early signs of replacing Gold as investors go-to safe-haven asset, a bullish upswing toward $60,000 currently appears inevitable. However, given the historical accumulation trends, BTC bulls could face major short-term resistance around the $58,500 area.

Looking at IntoTheBlock’s Global In/Out of the Money data, 499,360 addresses had acquired 98,330 BTC at the average price of $58,113. If these holders choose to book profits early, BTC price will likely consolidate within the $55,000 to $57,000 range for a while longer.

However, if the BTC ETF trading volumes maintain the momentum as observed on Feb 26 and 27th, Bitcoin price could hit $60,000 in the days ahead.

Bitcoin (BTC) Price Forecast | Source: IntoTheBlock
Bitcoin (BTC) Price Forecast | Source: IntoTheBlock

On the flip side, the bears can regain foothold in the markets if the can stage a rapid reversal below $50,000. But given the current market dynamics, this outlooks seems unlikely.

Moreso, the large cluster of 1.8 million existing holder addresses that acquired 862,820 BTC around the $52,100 territory could mount an imposing support buy-wall, to prevent such rapid downswing in the short-term.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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