Diversification Through Gold and Bitcoin ETFs Drives Market Growth in 2025

Bitcoin and gold are up 28% YTD, with investors turning to ETFs for diversification. Gold ETFs have surpassed $170 billion in AUM, while cryptocurrency ETFs have reached $123.9 billion. The SPDR Gold Shares ETF (GLD) and iShares Gold Trust (IAU) are the two primary gold ETFs, while the iShares Bitcoin Trust ETF (IBIT) is the largest bitcoin ETF, with AUM approaching $100 billion.

As of July 2, 2025, both gold and Bitcoin have seen a significant year-to-date (YTD) return of 28%, drawing investor attention to the alternative asset space. This trend is primarily driven by the growing popularity of Exchange-Traded Funds (ETFs) that track these assets, offering investors an easy and diversified way to participate in the market.

Gold ETFs have experienced substantial growth, with total assets under management (AUM) surpassing $170 billion [1]. The SPDR Gold Shares ETF (GLD) and iShares Gold Trust (IAU) are the two primary gold ETFs, with GLD holding $102 billion and IAU at $48 billion in AUM [1]. These funds track the yellow metal closely and offer low expense ratios, making them attractive to investors seeking exposure to gold without the hassle of physical ownership.

On the cryptocurrency front, Bitcoin ETFs have also gained significant traction, with AUM reaching $123.9 billion [1]. The iShares Bitcoin Trust ETF (IBIT) is the largest Bitcoin ETF, with AUM approaching $100 billion. IBIT has been a popular choice among financial advisors due to its simplicity and low cost, offering investors a way to gain exposure to Bitcoin without the need to manage digital wallets [1].

Beyond Bitcoin and gold, other metals and cryptocurrencies have also shown strong performance. Spot platinum and palladium have seen price increases of over 50% and 40% respectively in 2025, while copper has also outperformed gold year-to-date [1]. For these metals, investors can use ETFs like the abrdn Physical Platinum Shares ETF (PPLT), abrdn Physical Palladium Shares ETF (PALL), and United States Copper Index Fund (CPER) to gain exposure.

In the cryptocurrency space, Ethereum (ETH-USD) has rebounded from a significant drop in early 2025, returning to positive territory. Funds tracking Ethereum are not as large as Bitcoin ETFs, but there are four of them with AUM of $1.7 billion or more, each with reasonable liquidity [1].

The growing interest in alternative assets is not without its challenges. Peter Schiff, a prominent gold advocate, has warned that gold is on the verge of outperforming cryptocurrencies in a significant way [2]. Schiff points to gold’s historical strength, strong performance this year, and its growing favor over Bitcoin. He believes that gold’s stability will shine through the noise, especially as central banks continue to purchase gold and market volatility rattles crypto.

Central banks are actively buying gold, with purchases expected to exceed 1,000 metric tons in 2025 [2]. This trend is driven by concerns over inflation, currency debasement, and geopolitical tensions, making gold an attractive safe-haven asset. In contrast, Bitcoin remains almost entirely absent from global reserve portfolios, with no major central bank adopting it as a formal reserve asset.

Bitcoin’s high volatility, three times higher than gold’s, has also been cited as a reason for its potential underperformance relative to gold [2]. During economic or geopolitical shocks, gold tends to rise in value, while Bitcoin often dips, indicating that investors still flee to gold first.

In summary, the year 2025 has seen a significant shift in investor attention towards gold and Bitcoin ETFs, driven by strong performance and the ease of diversification offered by these funds. While Bitcoin has gained significant traction, gold’s historical reliability and stability may prove to be a stronger asset in the long run, according to some experts.

References:
[1] https://seekingalpha.com/article/4803774-gold-bitcoin-shining-in-2025-as-etfs-drive-diversification
[2] https://m.economictimes.com/news/international/us/peter-schiff-just-dropped-a-bombshell-gold-about-to-leave-crypto-in-the-dust/articleshow/122907169.cms