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Americans withdraw investments from gold and place them in Bitcoin
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Historically considered a safe haven, gold faced a sharp decline following the victory of Donald Trump in November election, recording biggest pullback since 1976, while Bitcoin ETFs soarwith billion-dollar acquisitions and shares doubling in price, reflecting a migration of investments in search of new opportunities.
It is common to see investors flock to gold as a safe haven during periods of political and economic uncertainty. This behavior can be seen during the pandemic in 2020, when gold ETFs saw significant capital inflows.
However, as the Federal Reserve Initiated Interest Rate Hikes to Fight Inflation in 2022the appeal of gold has diminished. Compared to investments in bonds that generate interest returns, the precious metal becomes less attractive.
At the beginning of 2024, the Optimism surrounding possible interest rate cuts by the Federal Reserve briefly revived investment in gold ETFs. However, this momentum did not last long, ceasing after the US election results in November.
Gold melts and turns into BTC
The victory of Donald Trump, who strengthened the dollar, triggered a new wave of gold ETF sales. The Republican’s return to the White House recorded the biggest drop in the price of gold since Carter’s election in 1976, with a 1.4% drop in the price of ore.
Therefore, the As investors exited their gold investments, they possibly redirected them to stocks and cryptocurrencies such as Bitcoin, according to Bloomberg. Last year, Bitcoin ETFs recorded acquisition volumes in the billions of dollars and share values, in some cases, doubled in price.
Among the reasons that may explain this redirection of investments, the return rates on Bitcoin ETFs stand out. The investor who bought a share of BlackRock’s Bitcoin ETF at the beginning of the year at US$22, saw its investment double and end the year worth US$54. In comparative terms, BlackRock’s iShares Gold Trust ETF, for example, had a profitability rate of 26.66% during the same period, according to data from VettaFi.
The interest in seeking cryptocurrencies over gold can also be seen in December, when assets under management of US BTC ETFs surpassed assets under management of Gold ETFs, $130 billion vs. $128 billion. BTC acquisitions took just 11 months to surpass gold assets acquired over decades.
Americans withdraw investments from gold and place them in Bitcoin
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Americans withdraw investments from gold and place them in Bitcoin
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Americans withdraw investments from gold and place them in Bitcoin
