Gold ETFs bleed $15 billion as Bitcoin draws safe-haven flows

Nearly $15 billion exited the SPDR Gold Shares ETF since March 1 as Bitcoin draws safe-haven flows, Bloomberg data show.

"Gold is undergoing a capital adjustment phase after the gold rush," Eric Balchunas, senior ETF analyst at Bloomberg, said.

The outflows from GLD, the world's largest gold ETF, are 50 percent higher than the aggregate outflows from all US spot Bitcoin ETFs since their peak last October, Balchunas noted. Gold prices dropped 12 percent in March, with a record single-day withdrawal of $2.91 billion on March 4. Market pricing implies just a 1.1 percent probability of gold reaching $4,600 by Aug. 1, according to prediction markets.

The rotation strengthens Bitcoin's case as a macro hedge and could drive significant capital into BTC and related exchange-traded products. Investors are rebalancing safe-haven allocations as elevated US interest rates and a stronger dollar reduce gold's appeal, while Bitcoin's fixed supply and growing institutional infrastructure position it as an alternative store of value.

The $15 billion exodus from GLD represents a strategic restructuring by institutional investors in the global reserve asset market, according to Balchunas. The scale of redemptions suggests declining confidence in gold as a safe-haven asset amid expectations that the Federal Reserve will maintain elevated interest rates.

Spot Bitcoin ETFs, by contrast, saw massive inflows after their approval before experiencing fluctuating capital flows due to heightened market volatility. Whether funds exiting gold will flow into Bitcoin and other digital assets is a key focus for the market going forward.

The Federal Reserve's next policy announcement, particularly any indications from Chair Jerome Powell regarding interest rates, could further influence the rotation dynamic. Central bank purchasing decisions, especially from China, and geopolitical developments in the Middle East that could trigger safe-haven demand are also key variables to watch.

This article is for informational purposes only and does not constitute investment advice.