Bitcoin’s Downturn Continues, Investors Shift Billions from Crypto and Gold to Semiconductors
Bitcoin has experienced a significant decline since the beginning of the year, falling below the $60,000 mark for the first time since late 2024. The largest funds tracking its performance have collectively shed over $8 billion in recent weeks.
Gold, which started the year with a positive surge to a new all-time high, has also seen its trajectory reverse and is now trading in negative territory. This raises the question of where investors are reallocating their capital.
ETF Outflows and Inflows
The exodus from Bitcoin Exchange Traded Funds (ETFs) began in November, following a substantial market correction in October. Investors withdrew $3.5 billion in November, with billions more pulled out in December and January. The trend showed a brief recovery in March and April, with net inflows of $1.32 billion and $1.97 billion, respectively.
However, May marked a renewed downturn, with $2.43 billion withdrawn. June is currently on pace to set a record for the highest net outflows, with over $4 billion already withdrawn. The cumulative net inflows for Bitcoin ETFs have decreased from a peak of $61.19 billion in October to $51.61 billion as of last week, representing a reduction of nearly $10 billion. In the past seven weeks alone, these funds have seen approximately $8 billion in outflows.
The performance of gold ETFs mirrors this trend. While these funds initially attracted significant capital at the start of the year, coinciding with gold’s record high, recent data indicates a shift. According to The Kobeissi Letter, ETFs tracking both Bitcoin and gold have experienced a combined $12 billion in cumulative outflows since April.
“The largest US gold-backed ETF, $GLD, is down -13% since the start of April, while the largest Bitcoin ETF, $IBIT, is down -12%,” the analysis noted.
A Broader Market Perspective
This pattern of withdrawals is not universal across all investment assets. Data from the same analysts reveals that US-listed ETFs, in general, have attracted over $1 trillion in net inflows in 2026, positioning them to set a new annual record.
The significant capital leaving Bitcoin and gold appears to be flowing into US semiconductor ETFs. The Kobeissi Letter reported that these semiconductor-focused ETFs have attracted $20 billion in cumulative inflows within the same timeframe that gold and Bitcoin funds lost $12 billion. This trend reportedly accelerated in mid-May and has continued into June.
Analysts concluded that semiconductor ETFs, such as $SOXX and $SMH, have seen substantial gains of 81% and 60%, respectively, over the period during which $GLD and $IBIT have declined by 13% and 12%. This suggests a rotation by retail investors out of gold and Bitcoin and into semiconductor stocks.
The data highlights a clear divergence:
- Since April, US gold and Bitcoin ETFs have recorded cumulative outflows totaling -$12 billion.
- Concurrently, US semiconductor ETFs have attracted cumulative inflows of +$20 billion.
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