What to Know
- Bloomberg analyst Eric Balchunas says Bitcoin is behaving more like gold today.
- Bitcoin’s volatility gap with gold narrowed to just seven percent.
- Despite ETF outflows, institutional Bitcoin holdings remain strong across markets.
Bloomberg ETF analyst Eric Balchunas says Bitcoin’s narrowing volatility gap with gold could strengthen its position as a diversification asset for institutional investors despite continued ETF outflows.
According to Balchunas, many large investors are not seeking technology-style returns from Bitcoin. Instead, they increasingly view the asset through the same lens as gold, using it to balance risk across broader portfolios. His comments come as volatility data shows Bitcoin moving closer to precious metals than many market participants expected.
The observation surfaced during a period of continued withdrawals from U.S. spot Bitcoin ETFs. Data from Arkham shows BlackRock transferred 2,448 BTC worth approximately $180 million to Coinbase Prime before the May 29 trading session. The transaction occurred as crypto investment products recorded a ninth consecutive day of outflows.
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Bitcoin Closes the Gap With Gold
Bloomberg terminal data shows BlackRock’s IBIT fund recorded a 60-day historical volatility of 34.177%. During the same period, the SPDR Gold Shares ETF posted volatility of 27.227%. As a result, the volatility gap between Bitcoin and gold narrowed to only 7%. The figure represents one of the closest relationships recorded between the two assets. For years, volatility remained one of the biggest concerns among financial advisers considering Bitcoin allocations. Consequently, many conservative investors remained cautious despite the asset’s long-term performance.
Balchunas noted that advisers already have access to technology exposure through equity markets and funds tracking major indexes. Therefore, they are increasingly interested in Bitcoin’s ability to function as a portfolio diversifier rather than a high-growth technology investment. Moreover, the latest data suggests Bitcoin’s risk characteristics are gradually evolving. That shift could make the asset more appealing to institutions seeking alternative stores of value.
ETF Market Maintains Strong Institutional Presence
Despite recent outflows, U.S. spot Bitcoin ETFs continue to manage substantial assets. According to SoSoValue data, the sector held $94.25 billion in net assets as of May 29. That total represents approximately 6.45% of Bitcoin’s market capitalization. BlackRock’s IBIT remains the largest fund in the category with $58.11 billion under management.
Additionally, cumulative net inflows into U.S. spot Bitcoin ETFs still stand at $55.79 billion since launch. Those figures indicate that most major institutional participants remain profitable despite the current withdrawal streak. Balchunas also highlighted IBIT’s resilience during periods of geopolitical uncertainty. He noted that the fund has outperformed parts of the traditional stock market since the Middle East conflict escalated in 2026.
While ETF outflows continue attracting headlines, analysts are increasingly focused on Bitcoin’s declining volatility. As the asset’s trading behavior moves closer to gold, institutions may find additional reasons to view Bitcoin as a long-term diversification tool within traditional investment portfolios.
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