In the midst of one of the most volatile financial markets in recent times, traders are turning to diametrically opposed exchange-traded fund (ETF) strategies to navigate the uncertainties. According to data from Bloomberg Intelligence, the year-to-date has witnessed record inflows into ETFs offering leveraged long exposure to volatile assets like stocks and cryptocurrencies, as well as funds holding risk-off assets such as cash and gold.

Bloomberg Intelligence analyst Eric Balchunas noted that there are "record flows going into leveraged long ETFs but also cash and gold ETFs as people buy the dip and hedge the dip at the same time." This trend indicates a diverse range of strategies being employed by traders to manage risk and seek opportunities in the market.

Leveraged ETFs are designed to amplify the daily performance of assets like stocks or cryptocurrencies, typically by two or three times. In 2025, leveraged long ETFs attracted net inflows of approximately $6 billion, while inflows into cash and gold funds approached around $4 billion, as per Bloomberg Intelligence data.

The recent surge in market turbulence following US President Donald Trump's tariff announcements on April 2 has prompted investors to seek refuge in alternative assets. The S&P 500 index has experienced a 5% decline since then, while Bitcoin has shown resilience. On April 22, Bitcoin's spot price crossed $90,000 per coin for the first time in six weeks, with Bitcoin ETFs attracting nearly $1 billion in net inflows. As of April 23, Bitcoin is trading above $93,000.

Despite being often referred to as "digital gold," Bitcoin's correlation with the safe-haven asset remains weak, trading more closely in line with equities. Binance, the world's largest cryptocurrency exchange, highlighted that Bitcoin's correlation with gold averaged around 0.12 over the past 90 days, compared to 0.32 for equities. The key question remains whether Bitcoin can revert to its historical pattern of low correlation with equities, with gold still being the preferred safe-haven asset for most investors.

As market volatility rises, cryptocurrency exchanges are capitalizing on the trend by focusing on financial derivatives like futures. Data from Coinalyze shows that in April, net open interest in Bitcoin futures surged by over 30% to approximately $28 billion.

In conclusion, as traders adapt to the unpredictable market conditions, a mix of leveraged long ETFs, cash, gold, and cryptocurrencies are being utilized

Source: https://cointelegraph.com/news/traders-into-leveraged-etfs-gold-volatility-bloomberg?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound