Bitcoin ETFs Listed in the U.S. About to Overtake Gold ETFs.

Bitcoin ETFs Closing in on Gold ETFs in Assets Amid Growing Institutional Interest

2024 has been a landmark year for bitcoin (BTC), fueled by rising institutional adoption and the increasing role of digital assets in traditional finance. This growth has been propelled by two major trends: the inclusion of bitcoin on corporate balance sheets as a treasury asset and the success of U.S.-listed bitcoin exchange-traded funds (ETFs), which have now accumulated more than 1 million BTC.

According to K33 Research, U.S.-listed bitcoin ETFs have surpassed their gold counterparts in terms of total assets under management (AUM), including leveraged products such as futures-based ETFs. As of December 17, bitcoin ETFs reached an AUM of $129.25 billion, slightly edging out gold ETFs, which hold an AUM of $128.88 billion, as reported by K33 Research analyst Vetle Lunde.

However, when looking exclusively at spot products, gold still holds a slight edge. Senior Bloomberg ETF Analyst Eric Balchunas notes that U.S. spot bitcoin ETFs manage $120 billion in AUM, compared to $125 billion for gold ETFs.

CME Market Showing Strong Institutional Momentum

The CME exchange, a key platform for institutional investors, continues to see robust activity, with futures open interest nearing record highs, currently standing at 212,635 BTC in open contracts. Additionally, the basis trade premium has surged, reaching 16.4%, the highest since November 2023. This indicates that CME traders are anticipating strong market momentum as 2024 winds down.

The report also highlights a widening contango, with January contracts trading at a 1.5% premium over December contracts, marking the highest next-month premium since November. The December contracts remain dominant, with open interest equivalent to 113,480 BTC. The upcoming roll for December is expected to be significant, with several banking holidays possibly contributing to a further widening of premiums for January contracts.

Since November 27, U.S.-listed bitcoin ETFs have seen continuous net inflows, totaling $6.5 billion, according to Farside data. As the basis trade premium rises and open interest grows on the CME, many of these inflows are part of the cash-and-carry trade strategy.

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