- Spot Bitcoin ETFs have revolutionized finance, accumulating $660 billion in trading volume by 2024
- Ethereum ETFs have also shown resilience, closing out 2024 with $35 billion in inflows despite challenges.
January 11, 2025 marked the first anniversary of the US Spot Bitcoin (BTC) ETFs. This revolutionary development has revolutionized both the cryptocurrency landscape and traditional finance.
Approved by the United States Securities and Exchange Commission (SEC) on January 10, 2024, these ETFs have quickly become a dominant force, accounting for the entire $44.2 billion in global crypto investments by the end of 2024 .
Summary of 1-year performance of Bitcoin ETFs
Early market leaders like BlackRock, Fidelity and Grayscale set the pace. Notably, Grayscale gained an advantage through its seamless conversion of an existing product into an ETF, starting with a significant $29 billion in assets under management.
Additionally, the first year of Spot Bitcoin ETFs was marked by staggering trading activity. According to The Block’s data dashboard, cumulative volumes exceeded $38 billion in the first month alone.. After six months, trading volumes had climbed to around $323 billion, eventually surpassing a staggering $660 billion by the end of the year.
Among these ETFs, BlackRock’s iShares Bitcoin Trust ETF (IBIT) stood out as a record-breaker, amassing $61 billion in assets under management (AUM) in one year. This feat surpassed its Gold ETF, which took two decades to reach $33 billion in assets under management.
Analyst comments on IBIT success
Making the same point, Bloomberg ETF analyst James Seyffart said:
“IBIT’s growth is unprecedented. It is the fastest ETF to reach most milestones, faster than any other ETF in any asset class.
However, IBIT’s dominance extends beyond spot trading. It even made waves in the options market, as Greg Magadini, director of derivatives at Amberdata, notes.
With $37 billion in inflows, IBIT captured 83% of all US crypto ETF inflows in 2024, solidifying its position as the market leader.
However, this resounding success has raised concerns about the viability of smaller Bitcoin ETFs. They now face increasing pressure to differentiate themselves in a market heavily skewed towards the popularity of IBIT.
Speaking to a publication, Bitwise Chief Investment Officer Matt Hougan noted:
“Some are larger, some are smaller, and there are often one or two very large ETFs. But there is no market where a single ETF brings together 100% of assets, and in markets that attract tens of billions of assets, there are consistently multiple high-performing ETFs.
Factors responsible for the success of the BTC ETF
The success of Spot Bitcoin ETFs stems from factors including Bitcoin price growth, sustained investor demand, April’s fourth halving, and concerns over rising U.S. debt, according to Hougan.
In fact, despite $149.4 million in outflows on the last trading day, analysts remain unfazed and focused on a potential Bitcoin supply shock driven by growing demand for these ETFs.
Meanwhile, Ethereum (ETH) ETFs are also gaining ground, closing out 2024 with $35 billion in inflows despite seeing $68.5 million in outflows on the last trading day. This resilience is a sign of growing confidence in Ethereum’s long-term potential.
Ergo, analysts predict that if trends persist, 2025 could be pivotal for Ethereum ETFs, positioning them to compete with Bitcoin ETFs while reshaping the crypto investment landscape.
