What to know:
- Bitcoin‘s institutional adoption has increased in 2024, with integration into public balance sheets and the success of U.S. spot-listed ETFs.
- U.S. spot-listed bitcoin ETFs have almost surpassed U.S.-listed Gold ETFs in terms of AUM.
- Bitcoin CME’s open interest remains strong, suggesting more momentum towards the end of the year.
As a seasoned crypto investor who has weathered multiple market cycles since the early days of Bitcoin, I must say that the developments we’ve seen in 2024 have been nothing short of remarkable. The institutional adoption of Bitcoin, particularly its integration into public balance sheets and the success of U.S. spot-listed ETFs, is a testament to the maturity and legitimacy of this asset class.
2024 saw a major milestone in digital assets, particularly bitcoin (BTC), due to heightened institutional interest. This transformation was primarily facilitated by two primary factors: first, the incorporation of bitcoin as a treasury asset on public balance sheets, and second, the triumph of U.S. ETFs that have accumulated more than 1 million BTC in assets.
According to a report from K33 Research, Bitcoin Exchange-Traded Funds (ETFs) that are listed in the U.S. have amassed more assets than their counterparts focused on gold. This is significant as it includes not just traditional ETFs but also leveraged products like futures-based ETFs. As of December 17, the total value of these Bitcoin ETFs has reached a staggering $129.25 billion, surpassing the $128.88 billion managed by Gold ETFs, as stated by Vetle Lunde, an analyst at K33 Research.
Nevertheless, when looking at just the spot-focused products, gold has a slight lead over its counterpart. As per Eric Balchunas, Senior ETF Analyst at Bloomberg, US Bitcoin spot ETFs manage an assets under management (AUM) of $120 billion whereas Gold ETFs handle slightly more with $125 billion in AUM.
CME activity remains strong
On the popular institutional trading platform, CME, activity remains robust as the number of open Bitcoin futures contracts inches closer to record levels, currently standing at approximately 212,635 BTC in outstanding contracts.
As a crypto investor, I’ve noticed an interesting trend: the basis trade premium has been on the rise and recently hit 16.4%, its highest point since November 2023. This suggests that traders on CME are expecting a surge in momentum as the year wraps up, which could potentially be beneficial for my investments.
“The report indicates that January contracts are currently trading at higher prices compared to December contracts, with the difference (or ‘contango’) reaching 1.5% on Monday, which is the largest gap since November 2023. The December contract on CME has the highest value, with approximately 113,480 BTC in open interest. The upcoming rollover to December is anticipated to be substantial, as several upcoming bank holidays could cause the January premium to increase even further.
Over the past month, I’ve observed an uninterrupted momentum in the U.S. market for spot-listed Bitcoin ETFs. Every day since November 27, these ETFs have experienced daily net inflows, accumulating a total of $6.5 billion as per Farside data. Notably, as the basis trade premium widens and with a surge in open interest contracts on the CME, a significant chunk of these daily net inflows can be attributed to the cash-and-carry trade.
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2024-12-19 13:26