Jannat Ara

Bitcoin ETFs Garner More Interest Than Gold Among Traditional Investors

In a notable shift of investor sentiment, Bitcoin exchange-traded funds (ETFs) are gaining favor over traditional gold, despite both assets reaching unprecedented price levels.

While both Bitcoin and gold have historically been considered hedges against inflation and valuable assets, recent trends show a significant preference for the cryptocurrency. Data indicates that gold ETFs experienced withdrawals totaling approximately $4.6 billion, whereas Bitcoin ETFs, approved by the SEC on Jan. 11, attracted $8 billion in net investments, marking a record debut for these financial instruments.

This shift in preference between Bitcoin and tangible assets like gold underscores changing investor behavior, particularly amidst the low-interest-rate environment brought about by the Covid pandemic. The comparison between the two assets, especially in their non-yielding nature, has become increasingly relevant, with investors closely monitoring monetary policy adjustments, global political uncertainties, and concerns over potential equity market downturns.

Bitcoin’s recent surge to its highest point in over two years, reaching $69,191 before experiencing a slight retracement of approximately 6%, reflects the growing confidence in the cryptocurrency. This surge in Bitcoin’s value, coupled with significant gains of around 60% for the year, suggests that investors are capitalizing on the asset’s potential amid market volatility.

In contrast, gold, while remaining near its record-high price of $2,141, has not seen the same level of investor interest, highlighting the diverging sentiments between the two assets in the current market landscape.

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