'Bitcoin ETF Becomes a 'Capital Black Hole'... US Pension Funds Also Pouring Money

Bitcoin ETF 1 Year, Surpasses Gold

'Digital Gold' Grows Larger than Gold

Total Net Assets Reach $129 Billion

Impact of Soaring Bitcoin Prices

Concerns Over Korea's 'Crypto Galapagos'

Eyes on Digital Gold: Bitcoin Spot ETF has established itself as a product with over 160 trillion won in assets just one year after being listed on the US stock market. On the afternoon of the 9th, the cryptocurrency status board installed at the Bithumb Lounge in Gangnam, Seoul, displays the Bitcoin price. Reporter Lim Hyung-taek

Bitcoin Exchange Traded Funds (ETFs) have surpassed the asset management scale of gold ETFs. This comes just one year after Bitcoin spot ETFs were listed on the US stock market. While Bitcoin has rapidly grown its presence to the point of threatening traditional assets like gold in the world's largest financial market, Korea, which has blocked everything from listing to trading, is being criticized for creating a 'Crypto Galapagos.'

According to the financial investment industry on the 9th, the net asset value (AUM) of Bitcoin ETFs once recorded $129 billion (about 189 trillion won). This surpasses the AUM of gold ETFs ($124 billion). As Bitcoin prices have adjusted below $100,000 recently, the net assets of Bitcoin ETFs and gold ETFs have been fluctuating.

Bitcoin spot ETFs are absorbing funds in the US, which accounts for 70% of the global ETF market. According to an analysis by Korea Economic Daily through Bloomberg, the ETF with the highest net inflow over the past year was BlackRock's 'iShares Bitcoin Trust ETF (IBIT).' This ETF attracted $37.4 billion (about 55 trillion won) over the past year. Bitcoin and Ethereum-related spot ETFs occupied all of the top five positions in terms of net inflow.

Institutional investments, including pension funds, followed. The Wisconsin Investment Board, a US pension fund with an operating scale of $156 billion (about 230 trillion won), purchased $250 million worth of IBIT. While the global financial market is rapidly changing around Bitcoin, it is pointed out that related discussions in Korea have not progressed at all over the past year.

The Financial Services Commission has established a Virtual Asset Committee to advance the virtual asset market, but it is reported that allowing Bitcoin spot ETFs is a lower priority.

Bitcoin ETF Surpasses Gold ETF in Net Assets

"The Most Successful Debut in History," Following Ethereum, Ripple, and Solana

"There has never been a product that debuted as successfully as the Bitcoin spot ETF in history." (Bloomberg)

Bitcoin spot ETFs have broken various records just one year after being listed on the US stock market. Among the 700 ETFs listed on the US stock market around this time last year, all of the top five products that attracted the most investment funds were cryptocurrency spot ETFs. The asset scale of 12 Bitcoin spot ETFs alone exceeded 160 trillion won. It is evaluated that Bitcoin has established itself as a core investment asset in the world's largest capital market.

○ Digital Gold Surpassing Gold

According to an analysis by Korea Economic Daily through Bloomberg on the 9th, the product with the highest net inflow among the 716 ETFs listed on the US stock market last year was the 'iShares Bitcoin Trust ETF' (ticker name IBIT). This product is a Bitcoin spot ETF introduced by the world's largest asset management company, BlackRock. Since its launch on January 11 last year, $37.4 billion (about 55 trillion won) has been invested in it by the 7th of this month.

Other Bitcoin spot ETFs such as 'Fidelity Wise Origin Bitcoin Fund' (FBTC), 'Ark 21Shares Bitcoin' (ARKB), and 'Bitwise Bitcoin' (BITB) ranked 2nd, 4th, and 5th in terms of net inflow, respectively. The 'iShares Ethereum Trust' (ETHA), which invests in Ethereum spot, ranked 3rd.

The net asset value (AUM) of the 12 Bitcoin spot ETFs listed in the US reached $112.7 billion (about 164 trillion won) as of the 7th. As new investment funds poured into the ETFs and Bitcoin prices surged, the AUM soared. The number of Bitcoins held by the 12 Bitcoin spot ETFs reached 1,143,858, exceeding 5% of the total Bitcoin issuance (about 21 million).

Bitcoin ETFs, called 'digital gold,' have grown to surpass gold ETFs. The AUM of Bitcoin spot and derivative ETFs listed in the US surpassed gold ETFs last month.

○ Pension Funds and Banks Line Up to Invest

The US Securities and Exchange Commission (SEC) approved the listing of Bitcoin spot ETFs on January 10 last year. It was officially recognized as an investment asset in the world's largest capital market 15 years after Bitcoin first appeared in January 2009. As a way to invest in Bitcoin like stocks opened up, Bitcoin investment is now protected within the institutional framework.

Institutional investors such as pension funds and banks have also started investing in Bitcoin spot ETFs. The Wisconsin Investment Board, a US pension fund, purchased $245.04 million worth of IBIT in the first quarter of last year.

IBIT, the largest Bitcoin spot ETF, surpassed $50 billion in net assets just 228 days after its launch. This is the shortest period in ETF history. Nate Geraci, CEO of ETF Store, evaluated IBIT as "the greatest launch in ETF history."

○ Capital Markets and Cryptocurrency Grow Together

After the approval of Bitcoin spot ETFs, the US is quickly incorporating virtual assets into the institutional framework. In July last year, Ethereum spot ETFs were launched, and listing work for other altcoin (cryptocurrencies other than Bitcoin) spot-based ETFs such as Ripple and Solana began. Option trading based on Bitcoin spot ETFs also started in November last year. As the scale of Bitcoin spot ETFs grows, the possibility of Bitcoin prices rising increases. This is because when new funds are inflow, the management company must purchase additional Bitcoin spot. Some in the market speculate that US retirement pensions (401K) may invest in Bitcoin spot ETFs in the future. Cryptocurrency asset management company Galaxy Digital predicts that the asset scale of Bitcoin spot ETFs in the US will surpass $250 billion this year.

Reporters Hyung-gyo Seo and Mi-hyun Cho seogyo@hankyung.com