The digital revolution and the rise of cryptocurrencies got a boost with the launch of the first spot Bitcoin (BTC) ETFs in the U.S. market, and it took less than a week for the value held in these products to surpass the value held in silver ETFs.
"Bitcoin ETFs have exceeded silver ETFs in the U.S. in terms of size, driven by the substantial market interest they have received," said Jag Kooner, head of derivatives at Bitfinex, in an interview with The Block.
Kooner added that pent-up demand for Bitcoin played a substantial role in elevating the digital asset ahead of silver in terms of assets under management (AuM).
Before the spot BTC ETF launches, silver was the second-ranked single commodity ETF in terms of AuM in the U.S., holding roughly $11.5 billion in value, according to data from ETF Database.
Single commodity ETF AuM. Source: ETF Database
Based on the latest Bitcoin ETF update from CC15Capital, which includes data through Wednesday, all of the spot BTC ETFs combined now hold a total of 650,540 BTC worth approximately $28.1 billion.
Bitcoin ETF holdings. Source: X
That means that silver now ranks third in terms of AuM within a single commodity ETF asset class behind gold, which has a combined AuM of $96.3 billion across 19 ETFs, and Bitcoin.
The Grayscale Bitcoin Trust alone holds 592,098 Bitcoin, which is worth more than all the U.S. listed silver ETFs.
“Grayscale's conversion of its existing bitcoin trust into an ETF created the world’s largest bitcoin ETF overnight,” Kooner said. “The level of trading reflects the pent-up demand for these products, and we expect that it will lead to increased liquidity and stability in the market.”
It’s worth noting that the Grayscale Bitcoin Trust originally launched on March 25, 2013, so it’s had over a decade to accumulate the Bitcoin it holds. Prior to the spot ETF launches, GBTC was the world’s most popular publicly traded Bitcoin investment vehicle and still dominates in terms of the number of BTC held under management.
But that is in the process of changing, as the above graphic shows that the number of BTC held in the fund has declined by 27,122 BTC since January 9.
"The ETF issuers have implemented competitive fee structures, featuring a range of discounted fees and fee waivers which should attract more investors and could lead to further competitive pricing among ETF providers," Kooner said. “While some in the investment community still view cryptocurrencies as risky, the growth of these ETFs could pave the way for more innovative crypto ETFs and new underlying assets such as Ether.”
The cumulative trading volume for the listed BTC ETFs surpassed $12 billion on Thursday, led by the products from Grayscale, BlackRock, and Fidelity.
Data provided by TradingView shows that Bitcoin continues to consolidate in a range between $41,600 and $43,600, and trades at a price of $41,845 at the time of writing.
BTC/USD Chart by TradingView
