Bitcoin is the new Gold after Bitcoin Halving

March 2, 2024

If you’re unfamiliar with Bitcoin halving, you might be wondering what it is and why would it lead to a price increase. Well, Bitcoin halving is an event that occurs roughly every four years when block rewards for miners are cut in half. Current block rewards are sitting at 6.25 BTC. In the upcoming halving, they will be cut to 3.125 BTC.
This decrease in the supply of new bitcoins entering circulation creates scarcity, driving up the price due to increased demand.

Historically, Bitcoin halving events have been associated with significant increases in the price of Bitcoin as investors anticipate a decrease in the rate at which new coins are mined, adding to the scarcity and perceived value of the cryptocurrency.

Money is flowing straight out of Gold ETFs, to the tune of over $3.6bn in 2024, and much of it is being moved straight into Spot Bitcoin ETFs. With Spot Bitcoin ETFs seeing around $6.3bn in inflows in just the last 6 weeks, it seems that…

From February 18th to February 23rd, Bitcoin ETFs registered $777.79m in inflows (with significant outflows since then). In the same period, Gold ETFs recorded $608.24 million in net outflows, adding to the massive outflows Gold ETFs have experienced in 2024.

Gold investors have found a new… gold.

Not all Gold ETFs are seeing an exodus though – VanEck Merk Gold Shares, FT Vest Gold Strategy Target Income ETF, and Proshares UltraShort Gold have only experienced minor outflows.

When the outflows from Gold ETFs are measured against the inflows to Spot Bitcoin ETFs, analysis sggest that the migration might not be so extreme, with only around 50% of the funds being moved directly from gold to crypto-based funds.