Bitcoin Spot ETFs Leap Towards the Market Cap of Gold Funds
$37 Billion already; Gold sits at $93 Billion
Bitcoin ETFs are just six weeks old
On January 10, 2024 the SEC gave its blessing to the issuance of spot Bitcoin ETFs (exchange traded funds). Nine new funds, issued by huge investment companies. The likes of BlackRock and Fidelity are now offering exposure to Bitcoin to their clients. Together, these two giants of the investing world manage over $13 trillion in assets.
And the nine new players have been buying. They’ve already scoopped up over $12 billion worth of Bitcoin.
BlackRock and Fidelity now own a combined 213,118 Bitcoins worth $10.8 billion for their spot ETFs.
At the same time, the largest Bitcoin fund, Grayscale’s GBTC, has been hemorrhaging assets, mainly due to its 1.5% annual fee. The new guys on the block are assessing fees of between .19% and .25%. Quite a difference.
Still, the net inflows into the Bitcoin ETFs and positive and quite impressive for just the first six weeks.
With the presence of the big players, and with the recent price runup to over $50,000 per Bitcoin, the total assets in Bitcoin ETFs now exceeds $37 billion. Compare that to the ETFs that buy gold, which have been around for over twenty years. The first gold ETF, “Gold Bullion Securities,” was launced in March, 2003. Total assets in gold ETFs are now around $93 billion.
Bitcoin, sometimes called “Digital Gold,” has made a significant dent into the market cap of gold funds.
Well, as many Bitcoin investors say, “Bitcoin is better at being gold than gold is.” Lots of truth there. It’s digital, portable, has a fixed cap, and exists on a blockchain ledger.
And it wasn’t a “sell the news” event
You know, the old investing adage, “buy the rumor, sell the news.”
Many investors speculated that, with all of the hype surrounding the approvals of the spot Bitcoin ETFs, Bitcoin’s price had fully priced in the event, and that the actual approvals would bring about a pullback. Wasn’t the case.
In the five months leading up to January 10th, Bitcoin’s price ran up from $26,600 to $46,600. A 75% burst.
However, in the six weeks since, the price has risen another 11.5%.
Bitcoin’s Market Cap Tops $1 Trillion
Currently, 19,626,614 Bitcoins have been mined, out of the total of 21,000,000 that will be created. Or, about 93.5% of all that will ever exist. Sure, some have been “lost,” but nobody knows what that figure is.
Thus, when the price recently topped $51,000 per coin, the market cap of Bitcoin again topped $1 trillion.
For perspective, that’s more than the market caps of -
Berkshire Hathaway, Tesla, Walmart, Eli Lilly, Visa, and JP Morgan.
Bitcoin’s Leap Year History
Next week marks February 29th, Leap Day of course, that once-every-four-years occurance. This will be Bitcoin’s fourth Leap Year. Hard to believe it’s been around that long. Fifteen years old now. Maybe there’s something to this technology.
Here are some cool facts about Leap Year:
It takes the Earth 365.24 days to rotate once around the sun. Thus, one day must be added to the calendar, about every four years.
Leap Year was first introduced by Julius Caesar, in around 46 BC. Leap Year would occur every four years. But Caesar’s calculations were a bit off. Thus,
Leap Year was adjusted to occur in every year divisible by four, but further, century years had to be divisible by four as well. So, 2000 was a Leap Year, but 1700, 1800, and 1900 were not. Remember that in the year 2100.
Queen Margaret of Scotland imposed fines on men who did not accept proposals from women on February 29th.
The twin cities of Anthony, Texas and Anthony, New Mexico are the self-proclaimed Leap Year capital(s) of the world, and each holds a four-day festival to celebrate the birthdays of Leap Year babies.
Well, those fun tidbits have nothing to do with Bitcoin, but good stuff anyway. So, where was the price of Bitcoin on previous Leap Days? Glad you asked:
Current price, February 21, 2024: $ 51,850.00
February 29, 2020 $ 8,599.51
Februay 29, 2016 $ 433.10
February 29, 2012 $ 5.10
And More February Bitcoin History
In February of 2021, Bitoin’s market cap reached $1 trillion for the first time. And here we are again, this week, over $1 trillion.
In February of 2018, the price of Bitcoin crashed after China imposed a complete ban on Bitcoin trading. The percentage of Bitcoin trading in Chinese currency then dropped from over 90% to less than 1%.
Thanks for reading. Stack sats. HODL.
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Issue No. 131, February 23, 2024
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.