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Bitcoin ETFs ‘sounding like an interesting safe play’ amid financial uncertainty: Expert

ETF Think Tank Director of Research Cinthia Murphy joins Yahoo Finance Live to discuss ETF opportunities in bitcoin, gold, and banks.

Video transcript

DAVE BRIGGS: The market is digesting the latest read on inflation. Consumer prices rising 1/10 of a percent in March and 5% year over year. Those numbers coming in below analysts' expectations. We'll get another read on the economy Friday with bank earnings.

Here with more themes to watch this week is Cinthia Murphy, ETF Think Tank Director of Research. And this week's "ETF Report" brought to you by Invesco QQQ. Nice to see you, Cinthia. So Bitcoin has been a bit of a surprise this year, tipping above the $30,000 level earlier today and then just below it now. What are we seeing in terms of inflows in that space?

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CINTHIA MURPHY: Yeah, it's been like-- it's a crazy year when you look at things like Bitcoin and gold making an equal amount of headlines. You would think they're opposite types of trade, one, a safe haven play, one a super-speculative play. But it's been kind of fascinating that in this market, filled with uncertainty, we're seeing Bitcoin not only perform really, really well but actually start to find new assets coming in, some through ETFs, a of it just directly Bitcoin buying.

And it's just this perception that selling momentum we saw so much in Bitcoin last year is over. There's no really big sellers out there anymore. And people are just optimistic about the opportunity here, a lot of it triggered by the banking crisis, as you know, very well, and just that concern that, when there are doubts about financials, when the dollar is weakening as we've seen, Bitcoin suddenly sounds like an interesting safe play, if you will.

SEANA SMITH: Cinthia, you also mentioned gold in there very briefly. What doe the inflows look like there in terms of how many investors are favoring some of those safety plays, given all of this uncertainty?

CINTHIA MURPHY: Yeah, gold has actually done very well too. It's picked up, I think, globally about $2 billion so far in recent weeks, which is a lot of money if you think that gold has kind of lagged the whole commodities segment for the last two, three years. All of a sudden, it's found its momentum. And assets are trickling in big time.

But if you look at portfolio managers and strategists out there, the call is one about risk management. And in that scenario, it's all about the diversification. So you keep your core equity. You keep your core fixed income position there. What do you do on the edges?

Gold is standing out as a big opportunity here because it hasn't really gone anywhere. So people see upside in gold more than downside. It's a safety play in a time of uncertainty. It's a hedge for inflation. And people are buying it. So it's been really a phenomenal year for gold so far.

DAVE BRIGGS: And to your point, it is a really strange dichotomy, seeing gold and Bitcoin rise together in this environment. In terms of volatility, in terms of risk, how do you compare them?

CINTHIA MURPHY: Yeah, I was also trying to look at some of the numbers to compare the two because they're so different. And I mean, you can easily say Bitcoin is, any given day, five, six times as volatile as gold is if you look at gold prices, they've moved between $1,800 and $2,000 an ounce in the recent past, where Bitcoin moves in the tens of thousands of dollars in any given week.

So it's-- the volatility is much, much bigger. So could you argue that Bitcoin is a safety play? Probably not, it's definitely a speculative asset. But it's been interesting to see that that idea of its role as exclusively speculation has been starting to change. I'm seeing more and more calls for Bitcoin as a long-term hold.

And as utility increases, as that's restrained supply keeps prices supported, and as concerns about banking and the dollar escalate, it just is an opportunity. So it's really is an interesting divergence between gold and Bitcoin as their storylines. But their role in the portfolio is starting to look a little bit similar.

SEANA SMITH: It's very interesting. Really tough to make sense of all of that. But Cinthia Murphy, great stuff. Thanks so much for joining us.