Are traders shifting from gold to bitcoin? JPMorgan solutions

The mixture of year-to-date outflows from gold exchange-traded funds (ETFs) and important inflows into ETFs is elevating questions on whether or not traders are diverting their funds from the bullion to the world’s largest cryptocurrency.

Pushed by robust curiosity in spot Bitcoin ETFs, BTC funds skilled an influx of $10.6 billion up to now this yr, in comparison with a $7.6 billion in outflows for bodily gold ETFs.

Nevertheless, JPMorgan strategists imagine this isn’t the case the place traders are shifting funds from gold to Bitcoin.

“We disagree and as a substitute imagine that non-public traders and people have propagated each gold and bitcoin YTD fairly than shifting from the previous to the latter,” analysts mentioned in a word.

Analyzing ETF flows alone could provide a deceptive perspective, doubtlessly underestimating the acquisition of gold by people and personal traders by bars and cash, whereas overestimating their funding in Bitcoin.

JPMorgan strategists highlighted a notable pattern the place retail traders are transitioning from holding Bitcoins in digital wallets “to the comfort and regulatory safety of the brand new spot bitcoin ETFs.”

“Past retail traders, speculative institutional traders equivalent to hedge funds, together with momentum merchants equivalent to CTAs, seem to have additionally propagated the rally by shopping for each gold and bitcoin futures since February, maybe much more closely than retail traders,” analysts wrote.