Key Takeaways:
Bitcoin ETFs have accumulated $121 billion in total assets since their launch one year ago.
The bulk of the assets are held by only three funds – BlackRock’s IBIT, Fidelity’s FBTC, and Grayscale’s GBTC.
Nearly $40 billion in new money has flowed into all the 12 spot Bitcoin ETFs.
As crypto ETFs filings surged in the first week post-Gary Gensler’s pre-emptive exit, it is worth reflecting on the performance of Bitcoin (BTC) exchange-traded funds one year after their approval by the SEC.
Gensler is the immediate past Chair of the U.S. Securities and Exchange Commission (SEC), infamous for his hostility toward crypto. But he was forced to greenlight the ETFs after losing a lawsuit brought by Grayscale Investments.
On Jan. 11, 2024, the first-ever spot Bitcoin exchange-traded funds in America began trading, with Gensler issuing a last-gasp warning that Bitcoin remains a “volatile asset” and investors should be careful. Many ignored his advice.
The launch was celebrated as a coming of age for the benchmark crypto asset, paving the way for Bitcoin’s mainstream acceptance on Wall Street as well as the launch of other crypto-based exchange-traded funds.
The products typically allow investors to gain exposure to Bitcoin without actually holding the asset themselves. To date, there are 12 Bitcoin funds including Blackrock’s iShares Bitcoin Trust (IBIT), Grayscale’s GBTC, and Fidelity’s FBTC.
Bitcoin ETFs See Record Inflows
The Bitcoin ETFs started trading one year ago with a total of $29 billion in assets, thanks to the conversion of Grayscale’s GBTC. As of Jan. 29, the total assets under management (AUM) across all the funds had climbed to $121 billion, according to Sosovalue data.
In early September, the total assets plunged 26% to a three-month low of $46 billion, raising concerns that BTC ETFs had not become the vehicles for traditional finance or “boomer” adoption that many had hoped for.
At the time, net outflows averaged more than $1 billion in just one week. “It’s not an adoption vehicle,” crypto analyst and macro investment researcher Jim Bianco wrote on X then. “Instead, [it is] a small tourist tool and on-chain is returning to TradFi.”
Ever since, the ETFs have seen a sharp increase in new money invested, with total net inflows of nearly $40 billion as of this writing. Notable daily net inflows of $987 million and $908 million were reported on Jan. 6, 2025, and Jan. 3, 2025, respectively.
As Bitcoin breached the psychological $100,000 mark in December, the rally triggered a 16-day streak of net inflows between Dec. 2 and Dec. 18.
On-chain holdings are also chasing record highs. Since the September lows, on-chain holdings of all the spot Bitcoin ETFs have risen from about 933,000 BTC to 1,197,000 BTC as of Press time, according to data from Dune Analytics.
That’s an increase of over 28% within five months, showing that investors accumulated Bitcoin as prices fell. The on-chain holdings also represent roughly 6% of Bitcoin’s total market capitalization.
Matteo Greco, research analyst at Canada Stock Exchange-listed crypto venture firm Fineqia, believes the increased inflows are an indication of renewed investor confidence in Bitcoin.
“The strong inflows in 2024 [~ $36 billion] created a self-reinforcing cycle – rising demand contributed to price appreciation, which in turn generated further inflows,” Greco told Cryptonews, adding:
“These exchange-traded funds have played a crucial role in accelerating digital asset adoption, expanding the investor base, and enhancing market transparency, security, and liquidity.”
Tidy Profits
The bulk of the $121 billion assets under management are held by only three funds – BlackRock’s IBIT (~$59.9 billion), Fidelity’s FBTC (~$22 billion), and Grayscale’s GBTC (~$21 billion).
In terms of total net inflows, IBIT also dominates, with over $39.8 billion in new money invested in the product since January 2024, according to Sosovalue. BlackRock’s Bitcoin ETF is particularly interesting.
As Greco pointed out, IBIT reached $10 billion in total assets in record time, achieving the milestone in just 37 trading days. By the end of December, it had grown to more than $50 billion in assets. No exchange-traded fund has ever had a better debut, experts say.
Rivals FBTC and GBTC have reported total net inflows of $12.8 billion and $21.9 billion, respectively since trading started one year ago.
Spot Bitcoin ETFs net assets. Source: Sosovalue
Bloomberg senior ETF analyst Eric Balchunas called the BTC exchange-traded funds the “most successful ETFs in history.”
In a previous post on X, Balchunas said the increase in net inflows is a sign that institutional investors have confidence in Bitcoin, contrary to claims the funds had failed to attract Wall Street wealth advisors.
Moreover, investors who put their money into the Bitcoin ETFs have returned some tidy profits. Bianco, said the dollar-cost average purchase price of the ETFs is $74,300 (seen in the chart below as a blue line), an unrealized gain of $12.7 billion (bottom panel).
“All these gains came after the [U.S. presidential] election,” Bianco, who is also the founder of Bianco Research, posted on X. But he warned that the unrealized gains will be “wiped out” should the BTC price fall to $68,000. BTC is currently trading at $105,000.
Balchunas, the Bloomberg analyst, said the spot Bitcoin exchange-traded funds started 2025 “on fire,” with $4.2 billion in inflows during the first three weeks of January. At the time, that was about 6% of all ETF flows in the U.S., he detailed.
He noted that BTC ETFs have posted a return of over 127% since their launch one year ago. The products have also surpassed Environmental, Social, and Governance ETFs in assets ($117 billion) and had about the same AUM as gold spot ($121 billion) on Jan. 24.
Institutional Bitcoin ETF Adoption Stumbles—Or Does It?
Bianco’s analysis hasn’t always endeared him with Bitcoin die-hards.
For example, when the ETFs saw massive outflows in the eight days to Sept. 9 – a total of $1 billion – with TradFi players pacing the sales, he described this as a sign of failure by the ETFs to attract institutional capital.
He backed up his claims with data. Bianco pointed to the average trade size of the ETFs, which dropped to a six-month low of $12,000 at the time. He said that the data shows that the primary buyers of Bitcoin ETFs are small retail investors, not institutional ones.
Compared to other exchange-traded funds, the average trade size of the Bitcoin ETFs “is a small fraction” of their sizes. For example, the average trade size of the GLD exchange-traded fund, which tracks a gold index, is about $70,000, per data from Bianco Research.
One of the key indicators of the supposed failure of Bitcoin ETFs to attract mainstream TradFi adoption is the composition of their holdings. Bianco said investment wealth advisors hold only 9% of the Bitcoin ETFs’ shares outstanding, with another 12% held by hedge funds. This means that 80% of the holdings are not from traditional finance clients.
He said this is backed by data from asset manager BlackRock, which revealed that 80% of inflows into its IBIT exchange-traded fund “are from self-directed online accounts.”
However, Balchunas dismissed the fears. According to the analyst, 1,000 institutions held Bitcoin ETFs on their books at the end of September, which was “unprecedented.”
Blackrock’s IBIT alone had over 660 holders, the analyst said, with 20% of its shares reportedly held by large advisors and institutions. Balchunas expects IBIT’s institutional holders to double this year.
Greco, the Fineqia research analyst, said while the outlook for “spot Bitcoin exchange-traded funds and other digital asset ETFs remains positive, forecasting the next phase is always challenging.”
“As with all risk-on markets, downturns are inevitable,” Greco told Cryptonews. “A broader market correction in equities or other asset classes would impact BTC ETFs, causing temporary negative flows.”
He added that despite short-term volatility, the long-term trajectory for products “remains promising, with the industry continuing to expand and institutional involvement steadily increasing.”
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