The Relationship Between Bitcoin and Gold ETFs Explained

The rise of Bitcoin ETFs has not led to significant outflows from gold ETFs, as per research by JPMorgan. The increased demand for Bitcoin ETFs has coincided with the selling of gold ETFs, leading to claims that investors are shifting from real gold to 'digital gold'. However, JPMorgan's analysis suggests that this may not be entirely accurate. The data shows a continuous period of outflows from gold ETFs, not accelerated by the emergence of US spot Bitcoin ETFs. In addition, a substantial amount has been invested in physical gold by private investors and central banks. The shift in demand has been attributed to behavioral changes triggered by the pandemic. Furthermore, the demand for Bitcoin has not been as strong as reflected solely by ETFs. The rally in both gold and Bitcoin has been driven by momentum traders, and central bank and OTC investment flows in gold have been positive. The impact of Bitcoin ETFs on gold ETF outflows may not be as significant as previously thought.