A Guide to Key Bitcoin ETF Metrics
BTC ETFs are quickly becoming the greatest ETFs of all time. Recently, the assets under management (AUM) of the US BTC ETF surpassed those of the gold ETF, despite the latter being around for 20 years. In just 340 days, the BTC ETF reached this milestone and is now in the spotlight. The fastest growing ETFs in history.
This is not just a win for the cryptocurrency market—it's a win for the BTC ETF itself. More and more institutional investors are incorporating it into their portfolios, signaling that BTC ETFs are becoming a mainstream investment tool on Wall Street, and a part of the global financial system.
If you don’t want to miss out on the crypto wave and are looking for a more convenient and relatively safer way to get involved in the cryptocurrency market, then the BTC ETF is your best bet.
Key Takeaways
As an investment tool that tracks the price of BTC, the performance of a BTC ETF is influenced by several key indicators. Understanding these metrics will help you better assess the investment value of a BTC ETF.
Tracking Error: This measures how closely the performance of the BTC ETF matches the performance of Bitcoin. A lower tracking error means the ETF is accurately reflecting Bitcoin’s price movements.If the tracking error is high, it indicates the ETF isn't closely mirroring Bitcoin’s performance, which could affect returns.
Premium/Discount (Prem/Dsc): The premium or discount refers to the difference between the ETF's market price and its net asset value (NAV). If the ETF is trading above its NAV, it's at a premium; if it’s trading below, it’s at a discount. Premiums and discounts reflect the market's demand for the BTC ETF. A long-term premium or discount could mean an imbalance in the market’s supply and demand, or that investor sentiment is overly optimistic or pessimistic.
Net Asset Value (NAV): The NAV of a BTC ETF is the total value of Bitcoin held by the ETF, divided by the number of outstanding shares. This helps investors understand the real value of the ETF in relation to the Bitcoin it holds.The difference between NAV and the ETF’s market price can give you insights into market sentiment and demand.
Volatility: Volatility measures the price fluctuations of the BTC ETF. High volatility means higher risk, while low volatility suggests a more stable investment. Investors often use this metric to assess the potential risk of the ETF. Since Bitcoin itself is volatile, BTC ETFs tend to show high volatility as well. Monitoring this change in volatility is key to understanding the ETF's risk level.
Fund Flows: Fund flows refer to the amount of capital entering or leaving the BTC ETF. The flow of funds indicates market interest in the BTC ETF. If there is a large inflow of funds, it could signal increased interest in Bitcoin; if funds are leaving, it could suggest declining market confidence.
Trading Volume: Trading volume is a key indicator of ETF liquidity and market activity. High trading volume ensures that investors can easily buy and sell ETF shares, reducing trading costs. Lower trading volume can lead to larger price swings and wider bid-ask spreads.
Asset Allocation: The allocation of different asset types (such as Bitcoin futures, spot Bitcoin, cash, etc.) within the BTC ETF affects its risk and return profile. Different ETFs might use different strategies or tools (like Bitcoin futures vs. spot Bitcoin), impacting their performance.
Trading Costs: Trading costs directly impact net returns. High trading fees can reduce long-term returns, especially with frequent trading. Choosing an ETF with lower trading costs is crucial for long-term investors.
BTC ETFs: Fueling Bitcoin's Price
Right now, large amounts of capital are flowing into Bitcoin through BTC Spot ETFs, pushing Bitcoin’s price higher. This is becoming the primary driver for Bitcoin's price to break the $100,000 mark.
For every 10,000 BTC added to the ETF holdings, Bitcoin's price increases by an average of 2.2%. Currently, BTC ETFs hold over 110,000 Bitcoins. In the past 30 days alone, $3 billion has flowed into Bitcoin through the ETF daily, which is driving Bitcoin’s price higher.
According to SoSoValue, BTC Spot ETFs have seen 15 consecutive days of net inflows, with the total net asset value of Bitcoin spot ETFs reaching $115.78 billion, and the ETF’s net asset proportion standing at 5.8%. The historical cumulative net inflows have reached $37.01 billion. In November, Bitcoin spot ETFs raised $6.1 billion in a single month, setting a record. These funds highlight the increasing interest of institutional investors, showing that Bitcoin has a solid support level. Even though Bitcoin's price dipped a bit after Powell's speech, and Bitcoin spot ETFs also saw some outflows after 15 straight days of inflows, remember this: the strategy with spot ETFs is all about spreading out risk, keeping costs low, and holding for the long haul. This helps you focus on Bitcoin's long-term growth potential. So, try to keep a long-term view and don't get shaken by short-term price swings. Like Warren Buffett says, "Be fearful when others are greedy, and greedy when others are fearful." When there's a big trend, every dip can be a great buying opportunity. And hey, this is a Bitcoin bull market!
How to Choose the Right BTC ETF
The cryptocurrency wave is still going strong, and if you don’t want to miss out on the party, Bitcoin ETFs are a fantastic way to get involved.
But here's the thing: there are two main types of Bitcoin ETFs—futures ETFs and spot ETFs. Which one is right for you? It's definitely the spot ETF.
That's because futures ETFs invest in Bitcoin futures contracts, meaning they don't actually hold the cryptocurrency. On the other hand, spot ETFs are based on physical Bitcoin. They directly hold it and track its market price, giving you a regulated and easy way to get exposure without buying or managing it yourself.
So, if you want to truly ride the Bitcoin wave, spot ETFs are the way to go.
But with 11 major BTC Spot ETFs available in the market, each with different fee structures and holdings, how do you choose the one that’s right for you?
This is where SoSoValue can be invaluable.
Following the US SEC's approval of 11 Bitcoin spot ETFs, SoSoValue has introduced a helpful tool: the Bitcoin Spot ETF Dashboard. By blending crypto market knowledge with traditional financial analysis, this dashboard is designed to help both crypto enthusiasts and traditional investors understand and analyze Bitcoin spot ETFs more effectively.
On SoSoValue Bitcoin spot ETF dashboard, you can view key metrics for 11 Spot ETFs, including daily net inflows or outflows, cumulative net inflows, and total net asset value (as a percentage of Bitcoin’s market value). These metrics help measure the amount of capital flowing into Bitcoin through ETFs from traditional finance, and track the movements of Wall Street institutions in real-time.
If you pick IBIT, you'll then see its price history since it launched, along with daily fund flows – how much money is going in or out each day. And of course, you can check out other important metrics for comparison, like BTC Share and NAV.
You can also see the core metrics for each Spot ETF, from holding percentages and NAV to fees and premiums/discounts. Plus, SoSoValue provides historical fund data, showing daily fund inflows and outflows since the Bitcoin spot ETFs were launched, giving you a complete overview of the market.
Now, you don’t have to worry about choosing the right Bitcoin ETF. Just head over to SoSoValue and easily access these key data points, allowing you to follow Wall Street’s moves and make more informed investment decisions.
A Guide to Key Bitcoin ETF Metrics
BTC ETFs are quickly becoming the greatest ETFs of all time. Recently, the assets under management (AUM) of the US BTC ETF surpassed those of the gold ETF, despite the latter being around for 20 years. In just 340 days, the BTC ETF reached this milestone and is now in the spotlight. The fastest growing ETFs in history.
This is not just a win for the cryptocurrency market—it's a win for the BTC ETF itself. More and more institutional investors are incorporating it into their portfolios, signaling that BTC ETFs are becoming a mainstream investment tool on Wall Street, and a part of the global financial system.
If you don’t want to miss out on the crypto wave and are looking for a more convenient and relatively safer way to get involved in the cryptocurrency market, then the BTC ETF is your best bet.
Key Takeaways
As an investment tool that tracks the price of BTC, the performance of a BTC ETF is influenced by several key indicators. Understanding these metrics will help you better assess the investment value of a BTC ETF.
Tracking Error: This measures how closely the performance of the BTC ETF matches the performance of Bitcoin. A lower tracking error means the ETF is accurately reflecting Bitcoin’s price movements.If the tracking error is high, it indicates the ETF isn't closely mirroring Bitcoin’s performance, which could affect returns.
Premium/Discount (Prem/Dsc): The premium or discount refers to the difference between the ETF's market price and its net asset value (NAV). If the ETF is trading above its NAV, it's at a premium; if it’s trading below, it’s at a discount. Premiums and discounts reflect the market's demand for the BTC ETF. A long-term premium or discount could mean an imbalance in the market’s supply and demand, or that investor sentiment is overly optimistic or pessimistic.
Net Asset Value (NAV): The NAV of a BTC ETF is the total value of Bitcoin held by the ETF, divided by the number of outstanding shares. This helps investors understand the real value of the ETF in relation to the Bitcoin it holds.The difference between NAV and the ETF’s market price can give you insights into market sentiment and demand.
Volatility: Volatility measures the price fluctuations of the BTC ETF. High volatility means higher risk, while low volatility suggests a more stable investment. Investors often use this metric to assess the potential risk of the ETF. Since Bitcoin itself is volatile, BTC ETFs tend to show high volatility as well. Monitoring this change in volatility is key to understanding the ETF's risk level.
Fund Flows: Fund flows refer to the amount of capital entering or leaving the BTC ETF. The flow of funds indicates market interest in the BTC ETF. If there is a large inflow of funds, it could signal increased interest in Bitcoin; if funds are leaving, it could suggest declining market confidence.
Trading Volume: Trading volume is a key indicator of ETF liquidity and market activity. High trading volume ensures that investors can easily buy and sell ETF shares, reducing trading costs. Lower trading volume can lead to larger price swings and wider bid-ask spreads.
Asset Allocation: The allocation of different asset types (such as Bitcoin futures, spot Bitcoin, cash, etc.) within the BTC ETF affects its risk and return profile. Different ETFs might use different strategies or tools (like Bitcoin futures vs. spot Bitcoin), impacting their performance.
Trading Costs: Trading costs directly impact net returns. High trading fees can reduce long-term returns, especially with frequent trading. Choosing an ETF with lower trading costs is crucial for long-term investors.
BTC ETFs: Fueling Bitcoin's Price
Right now, large amounts of capital are flowing into Bitcoin through BTC Spot ETFs, pushing Bitcoin’s price higher. This is becoming the primary driver for Bitcoin's price to break the $100,000 mark.
For every 10,000 BTC added to the ETF holdings, Bitcoin's price increases by an average of 2.2%. Currently, BTC ETFs hold over 110,000 Bitcoins. In the past 30 days alone, $3 billion has flowed into Bitcoin through the ETF daily, which is driving Bitcoin’s price higher.
According to SoSoValue, BTC Spot ETFs have seen 15 consecutive days of net inflows, with the total net asset value of Bitcoin spot ETFs reaching $115.78 billion, and the ETF’s net asset proportion standing at 5.8%. The historical cumulative net inflows have reached $37.01 billion. In November, Bitcoin spot ETFs raised $6.1 billion in a single month, setting a record. These funds highlight the increasing interest of institutional investors, showing that Bitcoin has a solid support level. Even though Bitcoin's price dipped a bit after Powell's speech, and Bitcoin spot ETFs also saw some outflows after 15 straight days of inflows, remember this: the strategy with spot ETFs is all about spreading out risk, keeping costs low, and holding for the long haul. This helps you focus on Bitcoin's long-term growth potential. So, try to keep a long-term view and don't get shaken by short-term price swings. Like Warren Buffett says, "Be fearful when others are greedy, and greedy when others are fearful." When there's a big trend, every dip can be a great buying opportunity. And hey, this is a Bitcoin bull market!
How to Choose the Right BTC ETF
The cryptocurrency wave is still going strong, and if you don’t want to miss out on the party, Bitcoin ETFs are a fantastic way to get involved.
But here's the thing: there are two main types of Bitcoin ETFs—futures ETFs and spot ETFs. Which one is right for you? It's definitely the spot ETF.
That's because futures ETFs invest in Bitcoin futures contracts, meaning they don't actually hold the cryptocurrency. On the other hand, spot ETFs are based on physical Bitcoin. They directly hold it and track its market price, giving you a regulated and easy way to get exposure without buying or managing it yourself.
So, if you want to truly ride the Bitcoin wave, spot ETFs are the way to go.
But with 11 major BTC Spot ETFs available in the market, each with different fee structures and holdings, how do you choose the one that’s right for you?
This is where SoSoValue can be invaluable.
Following the US SEC's approval of 11 Bitcoin spot ETFs, SoSoValue has introduced a helpful tool: the Bitcoin Spot ETF Dashboard. By blending crypto market knowledge with traditional financial analysis, this dashboard is designed to help both crypto enthusiasts and traditional investors understand and analyze Bitcoin spot ETFs more effectively.
On SoSoValue Bitcoin spot ETF dashboard, you can view key metrics for 11 Spot ETFs, including daily net inflows or outflows, cumulative net inflows, and total net asset value (as a percentage of Bitcoin’s market value). These metrics help measure the amount of capital flowing into Bitcoin through ETFs from traditional finance, and track the movements of Wall Street institutions in real-time.
If you pick IBIT, you'll then see its price history since it launched, along with daily fund flows – how much money is going in or out each day. And of course, you can check out other important metrics for comparison, like BTC Share and NAV.
You can also see the core metrics for each Spot ETF, from holding percentages and NAV to fees and premiums/discounts. Plus, SoSoValue provides historical fund data, showing daily fund inflows and outflows since the Bitcoin spot ETFs were launched, giving you a complete overview of the market.
Now, you don’t have to worry about choosing the right Bitcoin ETF. Just head over to SoSoValue and easily access these key data points, allowing you to follow Wall Street’s moves and make more informed investment decisions.
