Bitcoin ETFs Take Second Place in U.S. ETF Commodity Market
Bitcoin exchange-traded funds (ETFs) have surpassed silver to become the second-largest commodity in the U.S. ETF market, trailing only gold.
The approval of spot bitcoin ETFs by the U.S. Securities and Exchange Commission has driven this change. Bitcoin ETFs, including the newly converted Grayscale Bitcoin Trust ETF (GBTC), now have almost $28 billion in assets under management (AUM). This is significantly higher than the $11 billion AUM of silver ETFs, according to etfdb.com.
While gold maintains its lead with approximately $95 billion in AUM, the rise of bitcoin ETFs demonstrates the increasing acceptance and popularity of the digital asset. Bitcoin has shown its appeal in the ETF market, typically dominated by traditional commodities.
An Impressive Performance of Bitcoin ETFs
The initial response to bitcoin ETFs has been overwhelmingly positive, with a historic trading volume of $9.6 billion in the first three days.
An analysis of the holdings reveals how bitcoin ETFs surpassed silver in AUM. The total number of bitcoins held in various ETFs, excluding GBTC, combined with GBTC’s bitcoin holdings, amounts to approximately $28 billion based on the current spot price of Bitcoin. This surpasses the AUM of silver ETFs.
Grayscale’s conversion of its Bitcoin trust into an ETF played a significant role in this shift, instantly creating the world’s largest spot bitcoin ETF. However, some market analysts caution against placing too much emphasis on the rapid climb of bitcoin over silver.
The Role of GBTC Conversion
Bloomberg ETF analyst James Seyffart highlights that interest in spot bitcoin was not solely driven by the launch of spot bitcoin ETFs. Much of it was a result of Grayscale’s GBTC conversion. Therefore, bitcoin was already in the second position as soon as the conversion occurred.
Eric Balchunas, Bloomberg’s senior ETF analyst, shares this view and adds that the excitement over bitcoin surpassing silver may not be as impressive when considering that 95% of the increase was due to GBTC conversion. He also emphasizes that reaching such milestones is more challenging when dealing with brand new ETFs and different measurement standards.
Hot Take: Bitcoin ETFs Gain Momentum and Overtake Silver
Spot bitcoin ETFs have overtaken silver in the U.S. ETF commodity market, cementing their position as the second-largest commodity after gold. The approval of spot bitcoin ETFs and the conversion of Grayscale’s Bitcoin trust into an ETF have highlighted the growing acceptance and popularity of bitcoin. Despite some analysts downplaying the significance of this shift due to the major contribution from the GBTC conversion, the impressive trading volume and rising AUM demonstrate the mainstream appetite for the digital asset.
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