Embracing diametrically opposed exchange-traded fund (ETF) strategies

The year-to-date has seen record inflows to ETFs providing leveraged long exposure to volatile assets such as stocks and cryptocurrencies

Traders are cutting bullish exchange-traded fund (ETF) strategies and shifting to risk-off assets as the year-to-date has seen record outflows from leveraged long ETFs and inflows into cash and gold funds, according to Bloomberg Intelligence.

The year-to-date has seen record inflows into ETFs providing leveraged long exposure to volatile assets such as stocks and cryptocurrencies, as well as funds holding risk-off assets such as cash and gold, according to data from Bloomberg Intelligence (BI).

“There's basically 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. May the best degen win!” said BI analyst Eric Balchunas in an April 23 X post.

Leveraged ETFs are funds that aim to multiply the daily performance of assets like stocks or crypto, usually by two or three times.

In 2025, leveraged long ETFs attracted net inflows of roughly $6 billion, while cash and gold funds saw inflows of nearly $4 billion, according to BI.

Digital gold?

The record fund flows come amid a spike in market turbulence after US President Donald Trump announced plans for sweeping tariffs on US imports on April 2.

Since then, the S&P 500 (INDEX:SP500), an index of large US stocks, has shed roughly 5% of its value, according to data from Google Finance.

Bitcoin (BTC) has been comparatively resilient. On April 22, the cryptocurrency’s spot price reclaimed $90,000 per coin for the first time in six weeks, with Bitcoin ETFs clocking nearly $1 billion in net inflows. The cryptocurrency trades above $93,000 as of April 23, according to Google Finance.

“Even in the wake of recent tariff announcements, BTC has shown some signs of resilience, holding steady or rebounding on days when traditional risk assets faltered,” Binance said in an April research report.

Bitcoin has often been referred to as “digital gold” but the cryptocurrency still has a weak correlation to the safe haven asset and trades more in line with equities, the exchange said. Its correlation with gold has averaged around 0.12 over the past 90 days, versus 0.32 for equities.

“The key question is whether BTC can return to its long-term pattern of low correlation with equities,” noted the report, adding that gold is still a preferred safe-haven asset for most investors.

Meanwhile, cryptocurrency exchanges are profiting off of rising volatility by doubling down on financial derivatives, such as futures.

In April, net open interest in Bitcoin futures increased by 30% to approximately $28 billion, according to data from Coinalyze.

News data source: kdj.com

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