The American spot Bitcoin exchange-traded funds (ETFs) that started their journey only this year have so much surpassed expectation that they are already altering Bitcoin’s landscape and actually fancying traditional finance as well.
After final approval by the US Securities and Exchange Commission (SEC) on January 10, 2024, the Bitcoin ETFs started on the next day and quickly brought in unprecedented numbers of actual users.
Bitcoin ETF Surpasses Expectations
These US spot Bitcoin ETFs have attracted cumulative assets of $44.2bn–as of December 2024–which exactly equals 100% of the global totals for crypto investment products inflows during the same calendar year. Analysts, who first estimated the progress to be much slower, now increasingly worry that such rapid growth was quite unexpected for industry leaders.
“Bitcoin is the best-performing asset in history.”
James Butterfill of CoinShares pointed out that previously, the estimates for 2024 was at $14 billion, then actual flows have already surpassed this level, some ETFs reaching big milestones. Notably, BlackRock’s Bitcoin ETF has attracted $61bn in AUM in less than a year; it took its gold ETF 20 years to hit $33bn.
Institutional adoption of BTC without owning and managing their own private keys has been a fundamental driver of the performance of these ETFs and was discussed by 21Shares’ Matt Mena and VettaFi’s Roxanna Islam. This coupled with other ideal macroeconomic factors such as interest rate cuts and generally positive outlook to policies on crypto under the incoming president Donald
Trump empowered growth. Other contributing factors include the increase in the price of Bitcoins and the approval of the SEC which eased the worry of investor over government clamp down on the digital currency. Specifically, but according to numerous experts, there are high chances for US Bitcoin ETFs.
Second-year flows are higher than the first-year, and as more people get onboard, the trend is set to persist in 2025 according to Bitwise’s Matt Hougan. iShares BTC Trust ETF owned by BlackRock amounted to $37 billion in 2024, however experts say smaller ishared BTC ETF can also sustainable, assets will be spread across multiple ETFs.
“Some are bigger, and some are smaller, and there are often one or two really large ETFs. But there is no market where one ETF gathers 100% of the assets, and in markets that attract tens of billions in assets, there are consistently multiple very successful ETFs.”
As there does not appear to be any other market that will close the gap to the US in terms of Bitcoin ETFs, the industry appears to be on track for further expansion in the next couple of years.
