Since their January launch, spot Bitcoin ETFs have attracted more than $20 billion in cumulative net inflow—the most successful ETF debut ever.
That is far quicker than the five years it took the gold ETF market inflows to reach the current level. Some experts think that Bitcoin ETFs will surpass spot gold ETFs in the next few years.
Bitcoin ETFs Hit $20 Billion, Fastest Growing Ever!
The spot Bitcoin ETFs finally broke the $20 billion mark in terms of total net inflows, a rare feat that shows the coin’s growing interest and acceptance in the investment world. Inflows have rapidly increased over the last couple of weeks, reflecting strong demand driven by both retail and institutional investors.
This sets a record for Bitcoin ETFs to be the fastest-growing ETFs ever, underlining a sea change in the investment climate. Analysts believe this could be the case as major mainstream institutions increasingly dive into the cryptocurrency markets.
According to Nate Geraci, President of the ETF Institute, comparing cumulative net inflows, gold ETFs started in 2004, while spot Bitcoin ETFs launched in 2024. Despite gold’s two-decade head start, Bitcoin ETFs could catch up or surpass gold ETFs in the next few years.
Here’s a chart for you…
Cumulative net flows into physical gold ETFs vs spot bitcoin ETFs.
Gold ETFs launched in 2004.
Bitcoin ETFs in 2024.
20yr head start for gold ETFs, but wouldn’t be surprised to see bitcoin ETFs surpass them in next 2yrs.
via @Todd_Sohn pic.twitter.com/1e6gOMb3VZ
— Nate Geraci (@NateGeraci) October 18, 2024
Eric Balchunas, a senior ETF analyst at Bloomberg, commented on social media that such Bitcoin ETFs set up this milestone after reaching a record 65 billion dollars in total assets under management because of a major week headlined by $1.5 billion in new inflows. This forms the indication of high demand among investors for Bitcoin ETFs.
They have attracted $20.26 billion in cumulative inflows since their inception on January 11, a milestone for the industry.
Credit: Farside Investor
BlackRock’s Bitcoin ETF Sees Massive Inflows
Over the last four days alone, the same 11 ETFs-ARK 21Shares, Invesco Galaxy, VanEck, WisdomTree, Fidelity, Valkyrie, BlackRock, Grayscale, Bitwise, Hashdex, and Franklin Templeton-saw a net inflow of roughly $1.64 billion. Such robust demand is underpinned by increasing mainstream acceptance and institutional interest in Bitcoin as an investable asset.
Notably, BlackRock had $393.4 million daily inflows on October 16, its highest since July 22, when it recorded $526.7 million. The inflow is representative that investors are growing in confidence in Bitcoin’s potential, with such big-name asset managers supporting these products.
Credit: Farside Investors
Also, recently, Quantity Funds announced the launch of a US Bitcoin and Gold ETF, which will provide investors exposure to these unique assets in one single wrapper.
Analysts at Standard Chartered believe that Bitcoin could revisit the $73,800 level it achieved in the past, especially with the upcoming US presidential election.
They describe one reason Trump’s re-election might produce a friendly environment for Bitcoin: he is friendly toward cryptocurrency. This momentum for spot Bitcoin ETFs illustrates a more significant trend of cryptocurrency gaining more traction as an asset class and driving further market development. At the time of writing Bitcoin price was up by 2% to $68,640.
Institutional Bitcoin Ownership on the Rise
According to Charles Schwab’s 2024 ETFs and Beyond Study, there is a noticeable trend among younger investors towards cryptocurrency, with 62% of Millennial ETF investors intending to allocate some of their portfolios to digital assets over the next year. This statistic reflects the growing interest in cryptocurrencies as a viable investment option among younger demographics, who are often more open to exploring innovative financial products.
Eric Balchunas also recently emphasized the significance of net outflows for Bitcoin ETFs, arguing that including the Grayscale Bitcoin Trust (GBTC) in the calculations solidifies their growth and removes any potential criticisms. He noted the importance of this metric, stating that it allows for a clear picture of the overall performance without giving critics any grounds to dispute the numbers.
Currently, US Bitcoin ETFs manage $65 billion in assets and collectively hold about 951,000 Bitcoin, marking a new record high. Balchunas pointed out that Bitcoin ETFs are nearing the estimated 1.1 million Bitcoin attributed to Satoshi Nakamoto, the pseudonymous creator of Bitcoin, stating they are “86% of the way to Satoshi.”
The significant inflows into these ETFs increase the total assets under management and influence the available supply of Bitcoin in the market. With major institutional investors like BlackRock continuing to accumulate Bitcoin, the role of ETFs in concentrating ownership of the asset is becoming increasingly apparent.
As the demand for Bitcoin ETFs rises, their impact on the broader market is expected to grow. They provide a regulated investment vehicle that appeals to both retail and institutional investors. This trend underscores the pivotal role Bitcoin ETFs play in shaping the future of cryptocurrency investments as more investors seek secure and regulated avenues for exposure to digital assets.
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