Bitcoin ETFs flip gold funds in AUM: K33 Research

Net assets in United States Bitcoin (BTC) exchange-traded funds (ETFs) surpassed those in gold funds for the first time on Dec. 16 as institutional asset managers clamor for the cryptocurrency, according to data from K33 Research.

On Dec. 16, US BTC ETFs collectively broke $129 billion in assets under management (AUM), surpassing US gold ETFs, which held an amount just shy of that figure, according to a Dec. 17 post on the X platform by Vetle Lund, K33 Research’s head of research. 

K33 Research is a digital asset researcher based in Norway.

According to Bloomberg ETF analyst Eric Balchunas, the AUM figure includes spot BTC ETFs as well as ETFs that track Bitcoin’s performance using financial derivatives, such as futures.

“[I]f you include all Bitcoin ETFs (spot, futures, levered) they have $130b vs $128b for gold ETFs. That said, if you just look at spot, btc is $120b vs $125b for gold,” Balchunas said. 

Either way, it’s “unreal” that Bitcoin funds are even competing with gold in this way after just 11 months, he added.

Related: BlackRock’s Bitcoin ETF flips gold fund

Bitcoin ETF dominance 

Spot BTC ETFs launched in January following a lengthy review process with the US Securities and Exchange Commission (SEC). 

Since then, Bitcoin has dominated the ETF landscape. US spot BTC ETFs broke $100 billion in net assets for the first time in November, according to data from Bloomberg Intelligence.

The surge in BTC ETF net assets reflects “a more positive outlook for the future of Bitcoin after Trump’s election win, which boosted performance and brought over $5 billion of inflows,” Bryan Armour, director of passive strategies research at Morningstar, told Cointelegraph in November.

BlackRock’s iShares Bitcoin Trust (IBIT) leads the pack among BTC ETFs, with nearly $60 billion in AUM, according to BlackRock’s website. 

In November, IBIT surpassed Blackrock’s gold ETF, iShares Gold Trust (IAU), in net assets. 

Debasement trade

Investors are turning toward gold and BTC in a so-called “debasement trade” as they brace for a “catastrophic scenario” amid rising geopolitical tensions, according to an October report by JPMorgan.

The ‘debasement trade’ refers to a spike in gold demand caused by factors ranging from “structurally higher geopolitical uncertainty since 2022, to persistent high uncertainty about the longer-term inflation backdrop, to concerns about […] persistently high government deficits across major economies,” among others, JPMorgan said.

On Dec. 16, the Bitcoin to gold ratio, measuring BTC’s purchasing power relative to the yellow metal, hit a new all-time high as Bitcoin’s price broke new records.

Magazine: Bitcoin dominance will fall in 2025: Benjamin Cowen, X Hall of Flame