Bitcoin’s Dominance Soars in 2024: Spot ETFs and Institutional Adoption Drive Growth
The year 2024 has proven transformative for digital assets, with Bitcoin (BTC) experiencing a surge in institutional adoption. This evolution has been driven by two key factors: the integration of Bitcoin into public balance sheets as a treasury asset and the growing success of U.S. spot-listed exchange-traded funds (ETFs), which have collectively secured over 1 million BTC.
Bitcoin ETFs Outpace Gold in AUM
A report from K33 Research highlights that U.S.-listed Bitcoin ETFs have surpassed Gold ETFs in total assets under management (AUM), including leveraged and futures-based products. As of December 17, Bitcoin ETFs boast an AUM of $129.25 billion, narrowly exceeding the $128.88 billion held by Gold ETFs.
When focusing exclusively on spot-based ETFs, Gold still holds a slight lead. According to Bloomberg Senior ETF Analyst Eric Balchunas, U.S. spot Bitcoin ETFs manage $120 billion in AUM, compared to $125 billion for spot Gold ETFs.
Institutional Activity at the CME
The Chicago Mercantile Exchange (CME), a key platform for institutional Bitcoin trading, continues to see robust activity. Futures open interest has reached new highs, with contracts totaling 212,635 BTC.
The basis trade premium — a measure of market confidence — has climbed to 16.4%, the highest level since November 2023. The premium for January contracts is particularly notable, widening to 1.5% over December contracts. This marks the largest next-month premium recorded since late 2023.
The December CME contract remains the most valuable, with open interest equivalent to 113,480 BTC. Analysts anticipate a significant December roll, potentially amplified by upcoming banking holidays, which could further boost the January premium.
Consistent Inflows into Bitcoin ETFs
Since November 27, U.S. spot-listed Bitcoin ETFs have recorded daily net inflows, accumulating $6.5 billion by mid-December, according to Farside data. A substantial portion of these inflows is linked to cash-and-carry trades, benefiting from the widening basis trade premium and growing open interest on CME contracts.
The Road Ahead
With strong institutional interest and the continued rise of Bitcoin ETFs, the digital asset market is poised for further growth. The developments in 2024 underscore Bitcoin’s increasing appeal as both a treasury asset and a financial instrument, solidifying its position in the broader investment landscape.
