The price of Bitcoin surpassed US$50k for the first time in over 2 years, as outflows from Grayscales GBTC Fund continues to slow. With spot Bitcoin ETFs seeing record breaking inflows and the Bitcoin halving set to occur in late April 2024, Bitcoin continues to break key resistance levels on its way to reaching a new all time high. As at the time of writing, Bitcoin’s price has already increased 18% year-to-date, and over 130% over 1 year.
US-based spot Bitcoin ETFs have now been trading for 21 days – how have they performed?
On 10 January 2024 (US-time), the US Securities and Exchange Commission approved 11 spot Bitcoin ETF applications filed by prestigious asset managers such as BlackRock, Fidelity, Ark Invests, and Franklin Templeton. In their first day of trading, the ETFs witnessed up to $4.6 billion in trading volumes, surpassing gold’s original record of over US$1 billion in trading volume. The Bitcoin ETFs are currently on pace to surpass US$40 billion in volumes, as at the time of writing, in just 21 days of trading. Grayscale’s GBTC currently boasts the largest volumes of all US-based ETFs, however, BlackRock recently surpassed Grayscale’s market share, with both Funds representing a combined 63% of the total market share.
Source: The Blocks Data Dashboard > https://www.theblock.co/data/crypto-markets/bitcoin-etf
Comparatively, assets under management are also boasting significant numbers, with both BlackRock and Fidelity collectively managing assets exceeding US$7 billion. At present, if you exclude GBTC, the US-based ETFs hold roughly US$10 billion in assets under management.
Source: The Blocks Data Dashboard > https://www.theblock.co/data/crypto-markets/bitcoin-etf
Over 70% of Bitcoin is held in the hands of long-term investors according to on-chain analysis; these large amounts of illiquid supply combined with strong inflows and the upcoming Bitcoin halving in 2024 create a very positive picture for Bitcoin.
As at the time of writing, Bitcoin is the 10th most valuable asset in the world by market capitalisation, with a market cap of over US$980 billion. Bitcoin’s market cap at its all time high totalled US$1.27 trillion, and if its price were to reach US$100,000, its market cap would total nearly US$2 trillion dollars. Currently, gold has the largest market cap in the world at US$13.7 trillion. If Bitcoin were to surpass the current market cap of gold, then its price would need to exceed US$700,000, at the present circulating supply of 19.6 million BTC. A feat that many prominent institutions, such as Ark invests, believe could be achievable within the next 6 years.
DigitalX Bitcoin Fund
Bitcoin’s performance over 2023 has been reflective in the performance of our own DigitalX Bitcoin Fund and DigitalX Digital Asset Fund, with both funds ranking as Morningstar’s 1st and 3rd best performing Australian funds of 2023. At DigitalX we manage two funds which offer direct exposure to Bitcoin for wholesale investors. Our DigitalX Bitcoin Fund has an investment grade rating from prestigious research house, SQM Research and is their best performing fund for 1 year returns and 2nd best performing fund for 3 year annualised returns. DigitalX is also the only Australian listed company to hold Bitcoin on its balance sheet.
DigitalX has lodged an application for a spot Bitcoin ETF with the ASX.
Recently DigitalX announced that we would be entering into a strategic partnership with Canadian-regulated digital asset fund manager 3iQ and ASX-listed K2 Asset Management to investigate and undertake the work to launch a spot Bitcoin ETF on the ASX. This will be a key focus of ours throughout 2024.
We believe that the biggest benefits of an ETF structure offering exposure to Bitcoin, would be accessibility, regulation, liquidity, and custody. The approval of an ASX-listed spot Bitcoin ETF will enhance the accessibility of Bitcoin for a broader spectrum of both retail and wholesale investors domestically, enticing institutions, or more specifically super funds who have been awaiting a regulated investment avenue. The resulting increase in liquidity from ETF inflows could also mitigate market volatility and attract risk-averse participants. ETFs typically trade on major exchanges, providing super funds with increased liquidity compared to a wholesale fund structure. The highly-liquid ETF structure would enable super funds to seamlessly buy and sell shares, potentially reducing transaction costs and allowing for more efficient portfolio management.
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Learn more about our Bitcoin Fund, Digital Asset Fund and DxART Fund by visiting https://digitalx.fund/
Or contact the team for more information – [email protected]
