Research from Standard Chartered Bank shows a marked exodus from spot gold exchange-traded funds (ETFs) to bitcoin ETFs.

Research from Standard Chartered Bank has shown a marked exodus from spot gold exchange-traded funds (ETFs) to bitcoin (BTC) ETFs, highlighting the shifting investor sentiment in the current market.

As bitcoin hovered just above the $95K threshold on Tuesday, the London-based bank's report by Geoffrey Kendrick, head of digital assets research, unveiled a significant shift in ETF flows.

This finding follows Kendrick's Monday report, which saw him predict a "fresh all-time high" for bitcoin at $120K by the summer with a potential of climbing all the way to $200K by the end of 2025.

Now, Kendrick has distributed another note to his clients where he focuses on the widening gap between gold ETF inflows and bitcoin ETF inflows, an indicator he says points to a potential surge in the digital asset’s price, similar to the all-time high that followed last year’s presidential election.

"The last time the gap was this wide was the week of the U.S. election," Kendrick explained. "Bitcoin gains are catching up to gold, and I think bitcoin is a better hedge than gold against strategic asset reallocation out of the U.S."

According to the report, net inflows into gold ETFs over the past 12 weeks totaled $1.9 billion, while net outflows from bitcoin ETFs amounted to $6.7 billion. However, when comparing the magnitudes of the inflows and outflows, a striking difference emerges.

The largest weekly inflow into gold ETFs occurred during the week of March 17, with $1.1 billion flowing into gold ETFs, whereas the greatest weekly outflow from bitcoin ETFs was observed during the week of April 28, with a staggering $9.4 billion flowing out of bitcoin ETFs.

This disparity in magnitudes underscores the strength of the outflows from bitcoin ETFs in comparison to the inflows into gold ETFs.

In essence, this shift in investor preference is evident in the sustained price recovery of bitcoin, which has remained elevated despite the outflows. This resilience suggests that institutional investors are continuing to allocate capital to bitcoin, even as retail investors may be pulling back from bitcoin ETFs.

Alternatively, the report also suggests that the outflows from bitcoin ETFs could be a response to retail investors shifting their investments into private bitcoin products, such as trusts or funds, which offer more customized and focused investment strategies.

Overall, the report provides valuable insights into the current trends in institutional investor activity within the cryptocurrency and broader financial markets. As the market continues to evolve, these insights can be helpful in understanding the forces that are shaping the market and the potential impact on prices and volatility.