Bitcoin ETFs Overtake Gold Funds in AUM
According to K33 Research, U.S. Bitcoin exchange-traded funds (ETFs) achieved a historic milestone on December 16, with their collective assets under management (AUM) exceeding those of gold ETFs for the first time. The data reveals:
- BTC ETFs: $129 billion AUM
- Gold ETFs: Slightly below $129 billion
Vetle Lund, Head of Research at Norway-based K33 Research, shared these findings via X (formerly Twitter) on December 17. The analysis includes both spot Bitcoin ETFs and derivative-based ETFs tracking BTC's performance, as noted by Bloomberg ETF analyst Eric Balchunas.
Balchunas emphasized the significance of this development:
"It's unreal that Bitcoin funds are competing with gold after just 11 months."
Key Factors Driving Bitcoin ETF Dominance
1. Regulatory Approval and Institutional Adoption
Spot Bitcoin ETFs launched in January 2024 after SEC approval, rapidly gaining traction among institutional investors. By November, these ETFs crossed $100 billion in net assets, according to Bloomberg Intelligence.
2. Market Sentiment and Inflows
Bryan Armour of Morningstar attributed the growth to:
- Renewed optimism post-U.S. elections
- Over $5 billion in inflows following a bullish market shift
3. BlackRock’s iShares Bitcoin Trust (IBIT) Leads
- AUM: Nearly $60 billion (per BlackRock’s website)
- Milestone: Surpassed BlackRock’s gold ETF (IAU) in November
The Debasement Trade: Bitcoin and Gold as Hedges
JPMorgan’s October 2023 report highlighted a growing "debasement trade," where investors flock to gold and Bitcoin amid:
- Geopolitical instability
- Inflation concerns
- High government deficits
Bitcoin vs. Gold Ratio: On December 16, BTC’s purchasing power relative to gold reached an all-time high, coinciding with Bitcoin’s price surge.
FAQs
1. What are Bitcoin ETFs?
Bitcoin ETFs are investment vehicles tracking BTC’s price, offering exposure without direct cryptocurrency ownership.
2. How do Bitcoin ETFs differ from gold ETFs?
While gold ETFs hold physical gold or futures contracts, Bitcoin ETFs include spot holdings or derivatives tied to BTC’s performance.
3. Why are institutions favoring Bitcoin ETFs?
Factors include regulatory clarity, portfolio diversification, and Bitcoin’s scarcity narrative as "digital gold."
4. What risks accompany Bitcoin ETFs?
Volatility, regulatory changes, and technological risks (e.g., blockchain security) remain key considerations.
👉 Explore Bitcoin investment strategies for institutional-grade insights.
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