As a researcher with a background in both traditional finance and digital assets, I find myself increasingly intrigued by the rapid evolution of Bitcoin ETFs, especially when compared to gold funds. Having spent years delving into the complexities of financial markets, it’s quite unreal to witness Bitcoin funds competing with gold in just 11 months.
For the first time on December 16th, the total value of assets held in U.S. Bitcoin exchange-traded funds (ETFs) exceeded that of gold ETFs, as institutional investors have shown a growing interest in Bitcoin, based on information from K33 Research.
On December 16th, the combined value of assets managed by U.S.-based Bitcoin Exchange-Traded Funds (ETFs) exceeded $129 billion, outpacing the total assets held by U.S. gold ETFs, which were slightly under that amount. This information was shared in a post on December 17th by Vetle Lund, the head of research at K33 Research.
K33 Research is a digital asset researcher based in Norway.
As per Bloomberg ETF analyst Eric Balchunas, when referring to the total assets under management (AUM) for exchange-traded funds (ETFs) related to Bitcoin, it includes both those that directly own Bitcoin (spot BTC ETFs), as well as funds that track Bitcoin’s performance indirectly by using financial instruments like futures.
Balchunas stated that when considering all Bitcoin Exchange-Traded Funds (ETFs), including those based on spots, futures, and leveraged versions, they collectively amount to approximately $130 billion. However, if we only focus on spot ETFs, Bitcoin stands at around $120 billion compared to gold’s $125 billion.
remarkably enough, I find it hard to believe that Bitcoin investment funds have managed to rival gold’s standing so significantly within only 11 short months – quite astonishing indeed.
Bitcoin ETF dominance
In January, Bitcoin-focused Exchange Traded Funds (ETFs) were introduced after undergoing an extensive evaluation by the U.S. Securities and Exchange Commission (SEC).
After that point, Bitcoin has ruled the roost when it comes to Exchange Traded Funds (ETFs). In fact, US-based Bitcoin Spot ETFs surpassed $100 billion in total net assets for the very first time in November, as per data from Bloomberg Intelligence.
The increase in total assets for BTC ETFs signifies a more optimistic perspective on Bitcoin following Donald Trump’s election victory, as it enhanced performance and attracted approximately $5 billion in investments, according to Bryan Armour, director of passive strategies research at Morningstar, during his interview with CryptoMoon in November.
According to BlackRock’s website, the BlackRock’s iShares Bitcoin Trust (IBIT) holds the highest assets under management (AUM) among Bitcoin ETFs, totaling approximately $60 billion.
In November, IBIT surpassed Blackrock’s gold ETF, iShares Gold Trust (IAU), in net assets.
Debasement trade
In response to escalating international conflicts and heightened geopolitical pressures, investors are increasingly favoring gold and Bitcoin in what’s being referred to as a “debasement trade.” This shift is based on a “catastrophic scenario” forecast presented in a report published by JPMorgan in October.
The term ‘debasement trade’ refers to an increase in gold demand due to a variety of factors, including heightened geopolitical uncertainty since 2022, ongoing questions regarding the future trajectory of inflation, and worries about elevated government deficits across significant economies, as stated by JPMorgan.
On December 16th, the comparison between the buying power of Bitcoin and gold reached an unprecedented peak. This is because Bitcoin’s value surpassed previous highs.
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2024-12-18 01:09