Bitcoin ETFs Surpass Gold ETFs in U.S. Markets
In a groundbreaking development in the financial world, U.S.-listed bitcoin exchange-traded funds (ETFs) have overtaken gold ETFs in terms of assets under management (AUM). As of Dec. 17, 2024, U.S.-listed Bitcoin ETFs have amassed an impressive $129.25 billion in AUM, outpacing Gold ETF AUM at $128.88 billion. This shift marks a significant milestone for digital assets, particularly bitcoin (BTC), signaling a surge in institutional adoption and investor confidence in the cryptocurrency market.
Key Factors Driving Bitcoin’s Success
The rise of U.S.-listed bitcoin ETFs can be attributed to two key factors: the integration of bitcoin into public balance sheets as a treasury asset and the success of spot-based ETFs in accumulating over 1 million BTC. This surge in institutional interest has propelled bitcoin to new heights, positioning it as a formidable competitor to traditional assets like gold.
CME Exchange Activity Soars
The CME exchange, favored by institutions, has experienced a surge in activity, with futures open interest nearing record highs at 212,635 BTC in open interest contracts. The basis trade premium has also reached 16.4%, indicating a bullish sentiment among CME traders as the year draws to a close. With January contracts trading at significant premiums relative to December contracts, the upcoming December roll is expected to be a pivotal moment in shaping market dynamics.
Net Inflows Signal Growing Investor Confidence
Over the past month, U.S. spot-listed bitcoin ETFs have witnessed consistent net inflows, totaling $6.5 billion since Nov. 27. This influx of capital is a testament to growing investor confidence in bitcoin and the broader cryptocurrency market. As the basis trade premium continues to widen and open interest contracts on the CME increase, investors are actively engaging in the cash and carry trade, leveraging the market dynamics to their advantage.
In conclusion, the rise of bitcoin ETFs surpassing gold ETFs in U.S. markets highlights the evolving landscape of digital assets and institutional interest in cryptocurrencies. As bitcoin continues to gain momentum and investor confidence, the financial world is witnessing a paradigm shift towards embracing digital assets as a legitimate investment avenue.
By James Van Straten, Senior Analyst at CoinDesk.