- Bitcoin exchange-traded funds have taken in $9 billion.
- Gold ETFs have suffered $2.8 billion in outflows.
- The Bitcoin basis trade is likely fuelling those numbers.
It’s a compelling narrative among many in crypto: Bitcoin is digital gold.
Its price behaviour has detached from that of risky tech stocks, which proves that investors think so, too.
Not so fast, says macro analyst Noelle Acheson.
“It feels like too tidy a narrative,” Acheson wrote in her “Crypto is Macro Now” newsletter. “We know that many gold investors are not interested in BTC, and vice versa.”
Her comments come as Bitcoin’s recent price relationship to gold is helping to shore up the haven narrative.
Investors are dumping gold exchange-traded funds and piling into Bitcoin — with the latter raking in $9 billion in inflows over the past five weeks, according to Bloomberg.
Meanwhile, gold ETFs have suffered $2.8 billion in outflows.
While both gold and Bitcoin have soared to records this year, their prices diverged in May — Bitcoin is up 14% this month while gold is down 2%.
The basis trade
For Acheson, the interest in Bitcoin ETFs over gold is less about ideology and more to do with an arbitrage opportunity called the basis trade.
That’s a strategy where traders buy spot Bitcoin — now made easier with the ETFs — and short Bitcoin futures, profiting from the difference between the two.
It worked well last year, especially in the last quarter of 2024, when demand for CME Bitcoin futures — measured in open interest — tripled to $23 billion.
Right now, the annualised return on the basis trade is nearly 10%, the highest since February, Acheson noted, citing CME.
That’s a big opportunity for sophisticated traders.
“A significant chunk of the inflows are from investors playing the basis trade,” wrote Acheson. “They buy spot exposure and sell futures.”
Gold comparison
That investors are fading the precious metal for Bitcoin has an obvious appeal to Bitcoiners: digital gold is winning.
Bitcoin ETFs hold upwards of 1.1 million Bitcoin or about $123 billion, according to Dune Analytics.
Just last week, BlackRock’s IBIT fund raked in $877 million, more than any other ETF on the market.
“Bitcoin is doing some catching up while benefiting from a resurgence of interest in risk assets,” said Acheson, referring to the crypto’s May comeback.
But, she notes, when it comes to safety, gold still shines.
“Many investors are just more comfortable with gold, even though they acknowledge that Bitcoin has more upside potential,” Acheson said, giving a nod to a debate about the topic on the “Talking Markets” show.
“And since safe havens are about peace of mind, gold is what they stick with.”
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
