Within a mere week of trading, Bitcoin Exchange-Traded Funds (ETFs) have surpassed their silver counterparts in the U.S. in terms of Assets Under Management (AUM). This remarkable achievement is attributed to the significant market interest they have garnered,” says Jag Kooner, the Head of Derivatives at Bitfinex. He further adds that the latent demand for Bitcoin has been instrumental in driving the digital asset ahead of silver in terms of AUM.
Previously, silver held the second position among single commodity ETFs in the U.S. in terms of AUM. However, the scenario has changed with the advent of spot Bitcoin ETF funds. These funds, which include the conversion of Grayscale’s GBTC trust, now hold approximately 647,651 Bitcoin, translating to an AUM of $27.5 billion, as per data from CC15Capital.
Coinglass data reveals that the Grayscale Bitcoin Trust ETF (GBTC) currently holds around 619,000 Bitcoin. This development has pushed silver to the third position within the single commodity ETF asset class, with an AUM of approximately $11.5 billion spread across five ETFs, as per the ETF Database. In contrast, U.S. funds holding gold have a combined AUM of $96.3 billion, spread across 19 ETFs.
Grayscale Trust Conversion Bitcoin trust into an ETF and Market Impact
The conversion of Grayscale’s existing Bitcoin trust into an ETF has resulted in the creation of the world’s largest Bitcoin ETF overnight, according to Kooner. He believes that the level of trading reflects the latent demand for these products and anticipates that it will lead to increased market liquidity and stability.
On the fifth day of trading for the new assets, the cumulative trading volume for the 11 funds exceeded $12 billion, as per Yahoo Finance data compiled by The Block. Kooner expects this robust interest to persist.
Jag Kooner further adds, “The ETF issuers have introduced competitive fee structures, including a range of discounted fees and fee waivers, which are likely to attract more investors and could lead to further competitive pricing among ETF providers.”
Despite some in the investment community viewing cryptocurrencies as risky, Kooner believes that the growth of these ETFs could pave the way for more innovative crypto ETFs and new underlying assets such as Ether.