Gold ETFs Shine as Crypto Investors Retreat

In 2025, gold exchange-traded funds (ETFs) have experienced a resurgence, attracting over $4 billion in investments since January. The SPDR Gold Trust (GLD) has risen nearly 12% year-to-date, contrasting with the iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA), which have seen declines of 7% and 29%, respectively.

This shift indicates a change in investor sentiment, with many moving away from cryptocurrencies toward the stability of gold. Notably, GLD received almost $2 billion in a single day, highlighting growing confidence in traditional assets.

George Milling-Stanley, chief gold strategist at State Street Global Advisors, emphasizes that gold's appeal lies in its protective attributes, offering diversification unmatched by many other assets. He points out that gold has historically provided protection during market downturns, citing events like Black Monday in 1987 and the global financial crisis of 2008.

In contrast, cryptocurrencies have exhibited significant volatility. Milling-Stanley notes that since 2020, Bitcoin has shown a strong correlation with the S&P 500, reducing its effectiveness as a portfolio diversifier. This increased correlation may be contributing to the recent outflows from crypto ETFs, as investors seek more reliable hedges against market instability.

The current trend suggests a renewed trust in gold as a stable investment, especially during periods of economic uncertainty. As the financial landscape continues to evolve, investors appear to be reassessing the roles of traditional and digital assets in their portfolios.