Geopolitical instability, specifically the Iran conflict, has caused a significant divergence between Bitcoin and gold. JPMorgan reports that while gold ETFs are experiencing outflows, BlackRock's iShares Bitcoin Trust (IBIT) is seeing substantial inflows. This trend reverses earlier patterns, indicating a shift in investor perception of Bitcoin as a safe-haven asset.
Since late February, the largest gold ETF has shed approximately 2.7% of its assets, while IBIT absorbed inflows equivalent to about 1.5% of its assets. This suggests a growing preference for Bitcoin exposure over traditional bullion, even with crypto's inherent volatility. IBIT's inflows since the start of 2024 have doubled those of GLD. However, institutional derivatives markets present a contrasting picture, with hedge funds reportedly reducing direct Bitcoin exposure as ETF buyers increase.