On December 16th, US Bitcoin (BTC) exchange-traded funds (ETFs) surpassed gold ETFs in terms of net assets for the first time, according to data from K33 Research. US BTC ETFs reached $129 billion in assets under management (AUM), surpassing US gold ETFs which held an amount just shy of that figure.
K33 Research is a digital asset research firm based in Norway. Bloomberg ETF analyst Eric Balchunas stated that the AUM figure includes spot BTC ETFs as well as ETFs that track Bitcoin’s performance using financial derivatives, such as futures. Balchunas added that it is “unreal” that Bitcoin funds are even competing with gold in this way after just 11 months.
Bitcoin ETF dominance has increased since spot BTC ETFs launched in January following a lengthy review process with the US Securities and Exchange Commission (SEC). US spot BTC ETFs broke $100 billion in net assets for the first time in November. BlackRock’s iShares Bitcoin Trust (IBIT) leads the pack among BTC ETFs, with nearly $60 billion in AUM.
In November, IBIT surpassed Blackrock’s gold ETF iShares Gold Trust (IAU) in net assets. Investors are turning toward gold and BTC in a so-called “debasement trade” as they brace for a “catastrophic scenario” amid rising geopolitical tensions. The ‘debasement trade’ refers to a spike in gold demand caused by factors ranging from “structurally higher geopolitical uncertainty since 2022, to persistent high uncertainty about the longer-term inflation backdrop, to concerns about […] persistently high government deficits across major economies,” among others, JPMorgan said.
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