According to CoinDesk, 2024 has seen a significant surge in digital assets, especially Bitcoin (BTC), thanks to increased institutional adoption. This shift has been facilitated by two main channels: the integration of Bitcoin into public balance sheets as a treasury asset and the success of US-listed exchange-traded funds (ETFs), which have raised over a million Bitcoin.
A report from K33 Research highlights that U.S.-listed Bitcoin ETFs have overtaken U.S.-listed gold ETFs in terms of assets under management (AUM), including leveraged products such as futures-based ETFs. As of Dec. 17, Bitcoin ETFs had $129.25 billion in assets under management, surpassing gold ETFs at $128.88 billion, noted K33 Research analyst Veitel Lund. However, when focusing solely on spot-based products, gold maintains a slight lead. Bloomberg’s senior ETF analyst Eric Balchunas reported that U.S.-listed Bitcoin ETFs held $120 billion in assets under management compared to $125 billion for gold ETFs.
The CME exchange, which is primarily used by institutions, continues to show strong activity, with open futures contracts approaching new highs, reaching 212,635 BTC in open interest. The report notes that the underlying trading premium has increased, reaching 16.4% – the highest level since November 2023. This suggests that CME traders are anticipating increased momentum as the year-end approaches. The report also notes that “January contracts are trading at a sharp premium to December contracts, with the gap widening to 1.5% on Monday – the highest next-month premium since November 2023. The December contract on CME remains the most valuable, with open interest equal to 113,480 BTC. The rollover in December is expected to be significant, with some upcoming bank holidays likely to widen the January premium even further.”
The momentum has continued over the past month, with Bitcoin ETFs listed on the U.S. spot market seeing daily net inflows of $6.5 billion since Nov. 27, according to Farside data. It’s important to note that as the underlying trading premium continues to widen and the number of open interest contracts on the CME increases, a significant portion of these net inflows are cash and carry trades.