(Bloomberg) -- A divergence is emerging in US exchange-traded funds as investors move from gold to its so-called digital counterpart, Bitcoin.

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Over the past five weeks, US Bitcoin ETFs have attracted more than $9 billion in inflows, led by BlackRock Inc.‘s iShares Bitcoin Trust ETF (IBIT). Meanwhile, gold-backed funds have suffered outflows exceeding $2.8 billion over the same period, according to data compiled by Bloomberg News.

While easing trade tensions has cut into demand for traditional havens like gold of late, Bitcoin’s perceived status as an alternative store of value is growing — just as concerns over US fiscal stability mount.

Bitcoin touched a record high of $111,980 earlier this month, buoyed by favorable regulatory signals — including progress on a stablecoin bill — and rising macroeconomic uncertainty. Gold, while still up more than 25% so far this year, has pulled back from recent peaks, trading roughly $190 below its all-time high.

Analysts say the rotation suggests a growing acceptance of Bitcoin as a legitimate portfolio hedge. “I remain bullish on both gold and Bitcoin,” said Christopher Wood, global equity strategist at Jefferies. “They remain the best hedges on currency debasement in the G7 world.”

Skeptics, though, have warned that Bitcoin’s volatility still undermines its status as a true haven. During past macro shocks, like the August unwinding of the yen-funded carry trade, Bitcoin fell sharply along with other risk assets.

Others see Bitcoin gaining an edge. “Bitcoin is more effective against financial system risks due to its decentralised nature,” Geoff Kendrick, global head of digital assets research at Standard Chartered, wrote in a recent note. He contrasted that with gold’s stronger performance during geopolitical flare-ups like tariff escalations.

Kendrick added that Bitcoin serves as a hedge through two routes: risks tied to the private sector — such as the collapse of Silicon Valley Bank in 2023 — and those tied to government institutions, including concerns over US Treasury stability. “The recent threat to Fed independence (via Powell’s potential replacement) falls squarely into the second category, along with the tariff escalation and broader concerns about US policy credibility,” he said.

Adding to its appeal, Bitcoin appears to be shedding its reputation as a tech-adjacent risk asset. “Over the past month, Bitcoin’s intraday correlation with Nasdaq, the dollar, and even gold, has been remarkably low,” said Dilin Wu, research strategist at Pepperstone. “These shifts suggest Bitcoin may increasingly be viewed as a hedge — or even a non-correlated asset class — rather than just a speculative trade.”

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The backdrop of fiscal strain is intensifying the debate. Moody’s Ratings recently stripped the US of its last triple-A credit grade, citing ballooning deficits and debt. That downgrade brought it in line with Fitch Ratings and S&P Global Ratings, both of which already rate the US below the top tier.

Still, gold remains the better performer year-to-date, with gains of about 25%, compared with Bitcoin’s 15% rise.

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