Bitcoin surpasses silver to become second largest ETF commodity in the US

"Bitcoin BTC +0.16% ETFs have exceeded silver ETFs in the U.S. in terms of size, driven by the substantial market interest they have received," Bitfinex Head of Derivatives Jag Kooner told The Block, adding that pent-up demand for bitcoin has played a crucial role in propelling the digital asset ahead of silver in AUM terms.

Silver was previously the second-leading single commodity ETF in terms of AUM in the U.S. However, spot bitcoin ETF funds, including the conversion of Grayscale's GBTC trust, now hold approximately 647,651 bitcoin, which amounts to $27.5 billion in AUM, according to CC15Capital .

According to data from Coinglass , the Grayscale Bitcoin Trust ETF (GBTC) currently holds around 619,000 bitcoin.

That places silver in third position in terms of AUM within a single commodity ETF asset class, with approximately $11.5 billion distributed across five ETFs, according to ETF Database . In comparison, U.S. funds that hold gold have a combined AUM of $96.3 billion, across 19 ETFs.

Top five commodity assets under management in the U.S. Image: ETF Database.

Grayscale trust conversion into an ETF

"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," the analyst added.

On Thursday, which is the fifth day of trading for the new assets, the cumulative trading volume for the 11 funds exceeded $12 billion, according to Yahoo Finance data compiled by The Block .

Kooner expects that this strong interest will continue.

"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," he 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," he added.