Crypto Vs Gold Trade Flips: Correlation Hits Two-Year Low, Bitcoin ETF Inflows Outpace GLD
Synopsis
Data from CryptoQuant showed Bitcoin’s correlation with gold has dropped to its lowest level since November 2022.
- Inflows into spot Bitcoin ETFs have increased, while gold funds have experienced outflows.
- JPMorgan analysts attributed the shift in part to geopolitical tensions, which have not driven both assets higher simultaneously.
- The divergence marks a reversal from earlier in the year when gold attracted stronger investor demand.
Bitcoin’s (BTC) correlation with gold fell to its lowest level since November 2022 on Wednesday, with inflows into spot Bitcoin ETFs rising while flows into gold declined.
“This means Bitcoin is moving in the opposite direction with strong intensity,” on-chain analysis firm CryptoQuant said in a post on X. “Capital flows into Bitcoin have driven its price up to $74K, while gold has experienced a slight decline.”
ETF Flows Highlight Capital Rotation
JPMorgan analysts, led by Managing Director Nikolaos Panigirtzoglou, noted last week that the correlation between Bitcoin and gold snapped under the pressure of the U.S.-Iran war. They said that while geopolitical instability usually drives a unified bid for safe havens, gold and Bitcoin were currently moving in opposite directions.
JPMorgan stated that this was a reversal in the trend seen earlier in the year when gold funds held the advantage. It is estimated that GLD saw 2.7% of assets under management (AUM) outflows, while the iShares Bitcoin ETF (IBIT) saw 1.5% of AUM inflows.
BTC Vs GLD: The Price Action
Bitcoin’s price was down 1.7% in the last 24 hours to around $72,400 on Wednesday morning. Retail sentiment around the apex cryptocurrency remained in ‘bullish’ territory over the past day, while chatter was at ‘normal’ levels.
Meanwhile, gold prices fell as much as 2.5% over the past day, trading just above $4,800 in early morning trade. The SPDR Gold Shares ETF (GLD) was among the top trending tickers on Stocktwits. Retail sentiment around the fund dipped deeper into ‘extremely bearish’ territory, while chatter remained at ‘normal’ levels over the past day.
Read also: Bitcoin Holds $74,000 Ahead Of Fed Rate Decision, Altcoins Lead Gains
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