Investors Leave Gold Markets to Enter Crypto

ETF provider CoinShares released the latest Digital Asset Fund Flows report indicating that investors are going out of gold markets and enter virtual currencies.

Gold Outflow

$429 million was invested into CoinShares` Bitcoin and Ethereum stock traded products last week. The company said it has seen the record of second-highest cryptocurrency investment inflow.

The report from CoinShares claimed that a record $15 billion in digital currency is under management now. Ethereum was in priority among investors with inflows of $87 million. The second-largest cryptocurrency now is representing 20% of CoinShares` total inflow.

Interestingly, the report drew a parallel between gold and Bitcoin investments:

“Gold has suffered from outflows from investment products of a record US$9.2bn over the last four weeks while Bitcoin saw inflows totaling US$1.4bn.”

According to Goldprice.org, the gold price decreased 10% from its high of $2070/oz in August to its current price of about $1,830/oz today. Unlike gold, Bitcoin price has increased by 56% from $11,700 in August to the current $18,220.

Gold vs. Crypto

Digital assets perform much better in 2020 if we speak about the whole picture of how cryptocurrencies look now compared to gold. The prices of gold are up just 22% since the beginning of this year but BTC has surged 150%. Ethereum has made an impressive 320% since January from $130 to the current price of $560.

“This suggests that investors are favoring Ethereum, likely due to greater clarity from the Ethereum management team on the much awaited Eth2 upgrades that make the network much more efficient and sustainable” commented ETH rally CoinShares.

Market Perspective

Cryptocurrency market is now going through the correction that started on December 1 when the total market cap hit $590 billion.

And despite the digital assets market going 7.5% down to the current level of $545 billion, crypto enthusiasts stay cool about it.

As trader and analyst ‘dave the wave’ calls everyone not to panic:

"Why is BTC down? Because it just doubled in price in a couple of months. This isn’t rocket science people."

Anyway, large institutional funds such as Grayscale have been purchasing cryptocurrencies to fuel their products and expose digital assets for professional investors.