Gold is losing its appeal, is what the bitcoin proponents say time and again. But it looks like it’s not just what the crypto enthusiasts have been saying; rather, it has actually been happening. The latest data from Bloomberg shows that gold ETF holdings have had their biggest one-day reduction since November 2016. An exchange-traded fund (ETF) tracks an asset, commodity, or index that can be purchased or sold on an exchange like a regular stock. Reportedly, total holdings have dropped 23.5 tons to 3058 tons, the lowest since last May.
This makes sense given the price of spot gold is trading around $1,770 an ounce, in a downtrend ever since hitting a new all-time high in August last year at $2,075 per ounce. Compared to gold’s -6.50% performance this year, so far, Bitcoin, aka ‘digital gold,’ has increased 88% in value YTD, while still being down over 16% from its ATH of almost $65,000. “Bitcoin is stealing gold’s shine,” noted Mike McGlone of Bloomberg. “Accelerating trends in decarbonization, electrification, and digitalization.” Even the largest gold ETF, SDPR Gold Shares (GLD), is recording a decline in its assets under management (AUM) at $58 billion, last seen in May 2020, down from $84.24 billion in August. This has been despite the fact that “we’re in an everything bubble,” in which we are seeing asset inflation increasing. https://twitter.com/mikemcglone11/status/1387044488447627282 This bubble can be overwhelmingly attributed to one singular trend, QE, which makes asset prices go up, notes Travis Kling, who runs the Ikigai fund. With the Federal Reserve continuing to add trillions of dollars to the market, everything is running hot, and “Bitcoin appears to have been purpose-built for a time such as this. A perfect mirror reflection of monetary and fiscal policy irresponsibility. Money printer go brrr and number go up,” he said. This is why in the last 11 years, as the total assets of the world’s central banks went straight up, BTC price went from nine cents to $65k. Kling said,
“Anyone in the world with an internet connection can buy $1 worth of Bitcoin & begin protecting themselves against monetary debasement & the rapidly increasing risk that the largest monetary experiment in human history will end poorly.”