It appears that Bitcoin is known as ‘digital gold’ for a reason. It is presently second only to gold among exchange-traded funds assets in the US stock market.
Bitcoin exchange-traded funds (ETFs) were introduced in the US market earlier this month, following much speculation, including an alleged ‘hacking’ of the Securities and Exchange Commission’s X social media account.
Cryptocurrency is currently dominating the segment, surpassing silver and trailing just gold.
Bitcoin ETFs have approximately $30 billion in assets under management (AUM) after only a few days of trading. Silver ETFs have an AMU of barely $11 billion, whereas gold continues to be the market leader with over $95 billion.
Investopedia defines an exchange-traded fund (ETF) as “a basket of securities that trades on an exchange just like a stock.”
ETFs track a certain index, sector, commodity, or other asset and can be bought or traded on a stock exchange just like normal stocks.
Bitcoin, one of the strongest and oldest cryptocurrencies, has experienced huge price fluctuations throughout the course of its 15-year existence. But Bitcoin ETFs are already approaching the safe-haven asset: gold.
According to a report on the Coindesk website on Wednesday (Jan 18), ETF inflows are near $1 billion, or around 21,000 Bitcoin.
“BlackRock‘s iShares Bitcoin Trust (IBIT) leads the way by adding 16,362 bitcoin, followed by Fidelity’s Wise Origin Bitcoin Fund (FBTC) with 12,112 bitcoin. Sizable exits from Grayscale’s Bitcoin Trust (GBTC), which has lost about 25,000 Bitcoin, brought down the overall industry inflow,” Coindesk reported.
Ophelia Snyder, the co-founder of 21Shares, the world’s largest crypto ETP provider, commented on X that it is “a fantastic validation of Bitcoin’s role as a reserve product and of the demand for Bitcoin exposure in financial markets”.
How big is the Bitcoin ETF’s $10 billion volume? Putting things into context
“Let me put into context how insane $10 billion in volume is in the first 3 days,” wrote Eric Balchunas, a senior ETF Analyst for Bloomberg, in a post on X.
He mentioned that 500 ETFs were introduced in 2023.
“Today, they did a COMBINDED $450m in volume. The best one did $45m. And many have had months to get going.”
However, there is a word of caution: Bitcoin prices are still decreasing on the spot market.
On Thursday (January 18), the cryptocurrency slid another 4.5 percent to $40,800. That is the lowest in a month.