In 2024, we are witnessing a remarkable surge in digital assets, especially with bitcoin (BTC). This momentum is largely due to increased institutional adoption of the cryptocurrency. Two primary factors are driving this trend: the inclusion of bitcoin in corporate balance sheets as a treasury asset and the thriving market for U.S. spot-listed exchange-traded funds (ETFs), which have collectively acquired over 1 million BTC.
According to a report by K33 Research, U.S.-listed bitcoin ETFs have officially outpaced their gold counterparts in terms of assets under management (AUM). Currently, bitcoin ETFs boast an impressive AUM of $129.25 billion, surpassing gold ETFs, which stand at $128.88 billion. This landmark achievement has been highlighted by analyst Vetle Lunde from K33 Research.
But hold your horses! When we look solely at spot-based products, gold still maintains a slight lead. Eric Balchunas, a Senior ETF Analyst at Bloomberg, notes that U.S. bitcoin spot ETFs possess $120 billion in AUM, while gold ETFs hold a slightly larger $125 billion.
Over at the CME exchange, which predominantly caters to institutional trading, there’s been a buzz of activity. The futures open interest is nearing unprecedented heights, currently at 212,635 BTC in open interest contracts.
The report reveals that the basis trade premium has been on the up and up, now hitting 16.4%, the highest since November 2023. This uptick suggests that traders on the CME are gearing up for potential increased momentum as we approach the end of the year.
In the latest trading sessions, January contracts are enjoying notable premiums over December contracts, with the contango expanding to 1.5%—the highest of the month. December contracts remain in high demand, holding an open interest comparable to 113,480 BTC. As we gear up for several banking holidays, the December roll is predicted to be significant as it might further amplify January premiums.
The upward trend hasn’t slowed down recently either. Since November 27, U.S. spot-listed bitcoin ETFs have experienced daily net inflows totaling $6.5 billion, according to data from Farside. This growth has been supported by widening basis trade premiums and increasing open interest contracts on the CME, leading to a considerable share of these inflows being part of the cash and carry trade.
The dynamic between bitcoin and gold ETFs is evolving, highlighting an exciting era for crypto enthusiasts and investors alike. It’s more than just numbers; it’s about a shift in how we view value and investment.
