Gold’s Correction Boosts Bitcoin, With Inverse ETF Flows Highlighting Shift in Investor Sentiment
In recent days, gold’s correction appears to have created favorable conditions for Bitcoin (BTC), with the two assets displaying inverse-correlation ETF flows on four separate occasions over the past week.
After a strong rally following President Trump’s Liberation Day tariffs in early April, gold surged to new highs, peaking above $3,500 per ounce on April 21. During that time, Bitcoin was trading at around $87,000—about 20% below its all-time high reached in January.
However, since then, gold has experienced a significant pullback, dropping nearly 10% to hover just above $3,200 per ounce. In contrast, Bitcoin has rebounded, gaining about 10% to reach a two-month high of $97,000.
Geoff Kendrick, a strategist at Standard Chartered, believes Bitcoin may now offer a more effective hedge than gold against strategic asset reallocation out of the U.S. According to Kendrick, this shift in investment behavior is reflected in the ETF inflows, with Bitcoin funds now receiving more inflows than gold funds—a reversal from previous trends.
Kendrick also pointed out that the last time Bitcoin ETF inflows outpaced gold by such a margin was during the week of the U.S. presidential election. Just two months later, Bitcoin had surged more than 40%, crossing the $100,000 mark.
As the market continues to adjust, it seems that gold’s ongoing correction may continue to benefit Bitcoin, as investors increasingly look to digital assets for diversification and hedging opportunities.
