The recent approval of spot bitcoin exchange-traded funds (ETFs) by the U.S. Securities and Exchange Commission (SEC) has led to a significant shift in the U.S. ETF market. Spot bitcoin ETFs, including the newly converted Grayscale Bitcoin Trust ETF (GBTC), now hold the second-largest position among commodities, surpassing silver and trailing only gold.
Rise of Spot Bitcoin ETFs
The approval of spot bitcoin ETFs by the SEC has catalyzed the rapid growth of these investment vehicles. With nearly $28 billion in assets under management (AUM), spot bitcoin ETFs have gained immense popularity. In contrast, silver ETFs currently hold $11 billion in AUM, according to etfdb.com.
While gold maintains its leading position with approximately $95 billion in AUM, the rise of spot bitcoin ETFs is a testament to the growing acceptance and popularity of digital assets. Bitcoin, often referred to as the digital counterpart to gold, has demonstrated its appeal in the traditionally commodity-dominated ETF market.
Positive Response and Trading Volume
The initial response to spot bitcoin ETFs has been overwhelmingly positive. Within the first three days of trading, these ETFs recorded an impressive $9.6 billion in trading volume. This historic figure highlights the strong demand for bitcoin ETFs among investors.
Analysis of Holdings
To understand how spot bitcoin ETFs surpassed silver in AUM, an analysis of the holdings was conducted. The total number of bitcoins held in various ETFs, excluding GBTC, was sourced from a post by CC15Capital on X. This figure was then combined with the number of bitcoins held by GBTC, as reported by Coinglass. Multiplying this aggregated total by the current spot price of bitcoin resulted in an approximate value of $28 billion, surpassing the AUM for silver ETFs.
Role of Grayscale's Conversion
The conversion of Grayscale's existing Bitcoin trust into an ETF played a pivotal role in this shift. This conversion instantly created the world's largest spot bitcoin ETF. ETF market analysts, such as James Seyffart and Eric Balchunas, caution against overestimating the significance of bitcoin overtaking silver, emphasizing that much of the growth was driven by Grayscale's GBTC conversion.
James Seyffart, a Bloomberg ETF analyst, explained that interest in spot bitcoin didn't surge with the launch of spot bitcoin ETFs. Instead, a substantial portion of the growth was a result of the GBTC conversion. Eric Balchunas, Bloomberg's senior ETF analyst, echoed this sentiment, stating that the excitement of bitcoin surpassing silver should be viewed in the context of the conversion rather than as a completely new milestone.
The Future of Spot Bitcoin ETFs
With the rapid growth and popularity of spot bitcoin ETFs, there is speculation about whether they will eventually surpass gold ETFs to claim the number one spot. The comments section below invites readers to share their thoughts and opinions on this topic.
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How To
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By: David Sencil
Title: Spot Bitcoin ETFs Overtake Silver to Become Second-Largest Commodity in U.S. ETF Market
Sourced From: news.bitcoin.com/bitcoin-etfs-eclipse-silver-claiming-second-spot-behind-gold-in-u-s-etf-market/
Published Date: Fri, 19 Jan 2024 20:30:14 +0000
