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- Vetle Lunde, an analyst from K33 Research, announced on X that Bitcoin spot exchange-traded funds (ETFs) in the United States have now officially outpaced gold ETFs.
- Bitcoin’s surpassing of gold in ETF assets reflects a generational shift in investor sentiment, with Bitcoin viewed as “digital gold” due to its limited supply and decentralized nature.
For the first time on December 16, 2024, net assets in Bitcoin exchange-traded funds (ETFs) in the United States exceeded those of gold ETFs, as reported by K33 Research on X, a digital asset research firm based in Norway. The increase in Bitcoin ETF assets over gold encapsulates a transformative moment in the financial sector, showcasing a shift in investor sentiment and highlighting the growing demand for digital assets as a legitimate investment choice.
In the United States, Bitcoin ETF AUM has surpassed gold ETF AUM.
Gold, with a 20-year head start, has been flipped. pic.twitter.com/nyCWtKtQaB
— Vetle Lunde (@VetleLunde) December 17, 2024
The total assets under management (AUM) for U.S. Bitcoin ETFs exceeded $129 billion, outpacing the total for gold ETFs, which were just under that threshold. Bloomberg ETF analyst Eric Balchunas elaborated that the AUM figure incorporates both spot Bitcoin ETFs and those using financial derivatives like futures to track Bitcoin’s performance.
People asking me about this. Answer is YES, if you include all bitcoin ETFs (spot, futures, levered) they have $130b vs $128b for gold ETFs. That said, if you just look at spot, btc is $120b vs $125b for gold. Either way, unreal we even discussing them being this close at 11mo. https://t.co/hq8QAc14Xa
— Eric Balchunas (@EricBalchunas) December 17, 2024
Balchunas emphasized the significance of this achievement: “If we account for all Bitcoin ETFs, including spot, futures, and leveraged products, they total approximately $130 billion compared to $128 billion for gold ETFs. However, if we focus exclusively on spot Bitcoin ETFs, they sit at $120 billion, substantially lower than gold’s $125 billion.” Regardless of how we look at it, he notes that it’s “remarkable” that Bitcoin funds are even competing with gold so soon after their introduction, a mere 11 months ago.
The Rise of Bitcoin ETFs
The launch of the first spot Bitcoin ETFs took place in January 2024 after a protracted review by the U.S. Securities and Exchange Commission (SEC), while gold ETFs have been available since 2003. In that relatively short time, Bitcoin ETFs have shown astonishing growth, bolstering both retail and institutional confidence in digital currencies. According to Bloomberg Intelligence, U.S. spot Bitcoin ETFs surpassed the $100 billion mark in net assets for the first time in November, marking a significant acceptance of Bitcoin as a legitimate asset class.
These ETFs allow investors to gain direct exposure to Bitcoin without the complexities of owning the cryptocurrency, effectively bridging the gap between conventional finance and the burgeoning world of digital assets. On the other hand, Gold ETFs are recognized for their benefits as a hedge against economic instability and inflation, offering lower capital commitment and eliminating ownership logistics. However, they have drawbacks, including potentially lower long-term wealth accumulation compared to physical gold, complexities in fund management, and management fees that can erode returns.
Bitcoin is increasingly being touted as “digital gold,” with features that make it a decentralized and modern alternative. Its capped supply of 21 million coins has particularly attracted investors during inflationary periods, prompting many to reconsider their traditional allocations.
Leading the way in BTC ETFs is BlackRock’s iShares Bitcoin Trust (IBIT), which boasts nearly $60 billion in assets under management, as outlined on BlackRock’s official website. Notably, IBIT crossed paths with BlackRock’s iShares Gold Trust (IAU) in November, surpassing it in net assets. Currently, BTC is trading at $104,567, slightly under its recent resistance level of $106,533. If large holders of Bitcoin increase their accumulation activities, the price of the coin is likely to recover this high and surge toward a new record.
