The moment U.S. Bitcoin (BTC) spot ETFs were launched last Thursday, they quietly achieved a significant milestone. The digital asset has now become the second-largest commodity ETF in the United States, with over $26 billion managed within the securities wrapper. This surpasses the value of silver ETFs, which currently hold slightly over $11 billion in assets, according to VettaFi.
The $26 billion figure for Bitcoin ETFs is based on data from Bloomberg ETF analyst Eric Balchunas, who noted that net flows into these funds increased by $1 billion within their first five days of trading.
It’s worth mentioning that the majority of Bitcoin holdings within these ETFs are not with the newly launched funds. Instead, the Grayscale Bitcoin Trust (GBTC), which initially traded as an investment trust back in 2013, currently holds $23.1 billion worth of Bitcoin assets in ETF form, as these coins were accumulated over several years.
Since its conversion into an ETF, Grayscale’s investors have been gradually selling their BTC holdings, at a rate of around $500 million per day. While many of these assets have moved into newer competitors that offer lower management fees, analysts have noted the significant selling pressure that Grayscale exerts on the market.
Addressing this situation, Balchunas commented, “This is a substantial daily outflow for The Nine [referring to the Bitcoin ETFs] to contend with each day… they’ve managed it well so far, but it’s certainly a considerable challenge.”
Bitcoin Versus Silver and Gold
Bitcoin experienced a significant drop to a yearly low of $40,300 on Friday, following its peak at $49,000 the previous Thursday, shortly after the ETFs were launched. Many investors interpret this price decline as confirmation that the ETF launches triggered a “sell the news” reaction.
In contrast, the prices of gold and silver have remained relatively stable this month, with gold hovering near $2,000 per ounce and silver around $22 per ounce.
Bitcoin is often compared to gold and silver as a hedge against monetary debasement by its biggest supporters. BlackRock CEO Larry Fink, who applied for the launch of the Bitcoin ETF, has repeatedly referred to Bitcoin as “digital gold.”
Gold maintains its position as the largest commodity ETF in the United States, with related funds managing $95 billion in assets. The market capitalization of gold is estimated to be around $13.59 trillion, whereas Bitcoin’s market capitalization stands at approximately $796 billion.
Despite approving Bitcoin ETFs, SEC Chairman Gary Gensler argued last week that Bitcoin should not be readily equated with gold. He stated, “The underlying assets in the metals ETPs have consumer and industrial uses, while in contrast, bitcoin is primarily a speculative, volatile asset that’s also used for illicit activities, including ransomware, money laundering, sanction evasion, and terrorist financing.”
