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Bitcoin Becomes the Second Largest Commodity in the U.S. After SEC’s Implicit Recognition

Bitcoin has achieved a new milestone in its journey to mainstream adoption. The Securities and Exchange Commission (SEC), the U.S. regulator of securities markets, has implicitly recognized Bitcoin as a commodity by authorizing several spot Bitcoin exchange-traded funds (ETFs) under a rule that applies to commodity-based trust shares.

The SEC’s approval of spot Bitcoin ETFs, which track the price of Bitcoin directly rather than through futures contracts or other derivatives, has boosted the demand and value of the digital asset. According to Capital15C, a crypto data provider, the total assets under management (AUM) of spot Bitcoin ETFs have reached $27.9 billion, equivalent to 647,651 Bitcoin. This makes Bitcoin the second largest commodity in the U.S. by AUM, surpassing the ‘Broad Diversified’ asset class, which holds $12,826 billion across 22 ETFs, and Silver, which holds $11,546 billion across 5 ETFs, according to etfdb.com, a website that tracks ETFs.

Source: Capital15C

The largest spot Bitcoin ETF is Grayscale Bitcoin Trust (GBTC), which holds approximately 600,000 Bitcoin, or 92.6% of the total. Grayscale, the largest digital asset manager in the world, recently converted its trust into an ETF, lowering its fees and increasing its liquidity. The conversion of Grayscale to an ETF also solidified Bitcoin’s position as a commodity, as it was previously classified as a grantor trust by the SEC.

AUM Leaderboard: Source: etfdb.com/etfs/commodity

The implicit recognition of Bitcoin as a commodity by the SEC marks a significant turning point for the digital asset, which has faced regulatory uncertainty and scrutiny for years. The SEC has previously rejected several proposals for Bitcoin ETFs, citing concerns over market manipulation, fraud, and investor protection. However, the SEC’s new chairman, Gary Gensler, who has a background in blockchain and crypto, has signaled a more open and pragmatic approach to regulating digital assets.

The SEC’s recognition of Bitcoin as a commodity also demonstrates a noteworthy evolution in the perception and integration of digital assets in mainstream financial ethos. While Bitcoin is not currently present in the list of ETFs below, which shows the top 10 commodities by AUM as of January 17, 2024, it would be ranked number 2 were it to be added in the future.

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