Bitcoin (BTC) ETF Products Outperform Gold (XAU) as the Flagship Coin Enjoys a Bullish Sentiment

U.S.-based spot Bitcoin ETF products have recently outparred gold, with the flagship coin enjoying a bullish sentiment,

The competitive landscape between Bitcoin (BTC) ETF products and the traditional asset, gold, is heating up, with interesting tidbits emerging.

As the flagship coin enjoys a bullish sentiment, mainly fueled by optimism over the first-ever spot Bitcoin ETF approval in the U.S., the traditional asset is mainly waning.

Recent price metrics reveal that BTC topped the $96K mark, up nearly 2% over the week. Whereas, gold’s price lost nearly 2% over the last 5 days, at $3,247.40 per ounce.

Bitcoin ETF Products Saw Record Breaking Inflows As Institutional Demand Soars

In sync with this bullish price action, U.S. Bitcoin ETF products have also quietly recorded robust net outflows, to the tune of nearly $2 billion in the past 7 days.

According to the latest statistics by SosoValue, these exchange-traded products recorded consecutive weekly net outflows for the second time this quarter.

Last week (ending April 25), U.S. BTC ETF products saw a staggering $3.06 billion in outflows, marking the first week of consecutive outflows since March end. Now, with nearly $2 billion worth of outflows as of the week ending May 2, it seems that institutional demand for the flagship crypto is on a notable rise.

At the beginning of this year, gold has been outperforming Bitcoin. But it will be interesting to see if we'll continue to see a paradigm shift in risk assets’ market sentiment.

As of reporting time, these U.S.-based BTC ETF products held $113.15 billion worth of assets.

On the other hand, it’s also worth pointing out that although gold has been outperforming Bitcoin since the beginning of this year, a paradigm shift in risk assets’ risk-return trade-offs seems to be emerging.

Sharpe Ratio For BTC Is At 0.40, Whereas Gold’s Is At 1.33

According to Fidelity’s Global Macro Director Jurrien Timmer’s X post, the see-saw dynamic between Bitcoin & Gold suggests that the crypto is about to outweigh the traditional asset. The Sharpe Ratio for BTC is at 0.40, whereas gold’s is at 1.33.

For context, the Sharpe Ratio measures the risk-adjusted returns of an asset. The higher the ratio, the better the return per risk unit. However, the negative correlation between the two assets suggests that BTC’s ratio highlights an underwhelming movement. Trimmer stresses, “So perhaps we are due for a baton-pass from gold to bitcoin.”

Besides, CoinGape also reported that crypto critic Peter Schiff still predicts a Gold rally is possible, mainly driven by U.S. macroeconomic policies. Broader market participants continue to extensively eye Bitcoin ETF products relatively more than Gold, speculating over potential investment opportunities amid dynamic stats.