In times of macroeconomic uncertainty, investors are increasingly seeking safe havens. Gold is currently benefiting from this development, while Bitcoin is failing to fulfill its role as digital gold, according to analysts led by Nikolaos Panigirtzoglou of JPMorgan in a recent study published Wednesday.
Gold is currently experiencing a real run. The precious metal is experiencing high inflows in both the ETF sector and the futures markets. “Despite declining market breadth and liquidity, gold continues to benefit from capital flows into safe havens, similar to currencies such as the Swiss franc or the yen,” the analysts write.
According to data from the World Gold Council, $21.1 billion flowed into gold ETFs worldwide in the first quarter, including $2.3 billion in ETFs from China and Hong Kong alone. This represents approximately six percent of total assets under management (AUM) of gold ETFs worldwide.
Bitcoin, on the other hand, is falling short of expectations. Analysts note that the cryptocurrency is neither benefiting from safe-haven flows nor attracting the interest of speculative investors. Bitcoin ETFs have been experiencing continuous outflows for three months, and speculative interest in the futures market is also waning. “Bitcoin has failed to benefit from the capital flows that support gold,” the experts conclude.
At the beginning of the month, analysts at JPMorgan pointed out that the narrative of Bitcoin as “digital gold” was increasingly under pressure. While gold is emerging as the winner from so-called “debasement trades” – hedging against currency devaluation – Bitcoin is left out.
The current market situation paints a clear picture: Gold is consolidating its position as a preferred safe haven, supported by strong inflows and speculative demand. Bitcoin, on the other hand, is currently struggling with declining interest and its role in the financial market. For investors seeking stability, gold currently remains the more attractive choice.
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