Gold and Bitcoin ETFs Draw Record Inflows Amid US Fiscal Fears
Gold and Bitcoin exchange-traded funds (ETFs) have drawn in a combined $7 billion over the past five trading days, as investors seek out scarce assets amidst growing concerns over US fiscal health. The inflows reflect a renewed interest in these assets as a hedge against currency debasement, with gold rising 13% this month to above $4,600 an ounce and Bitcoin moving above $80,000.
According to data compiled by Bloomberg on August 26, State Street's SPDR Gold Shares (GLD) took in about $3.4 billion, while BlackRock's spot-Bitcoin ETF, IBIT, attracted $1.5 billion, both ranking among the top 10 US ETFs by weekly inflows.
Gautam Chhugani, Bernstein's global head of digital assets research, said that the interest burden on government debt has increased due to rising long-term Treasury yields and the end of the 40-year era of falling interest rates. Eric Balchunas, Bloomberg Intelligence's senior ETF analyst, noted that Bitcoin's original investment case as a hedge against policy-driven currency debasement is gaining traction again.
However, not all analysts agree on the reasons behind the tandem rally. Hardika Singh, an economic strategist at Fundstrat, said that fiscal concerns alone may not be enough to sustain the advance and that stocks could prove a more stable hedge.