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The Bitcoin ETF ended last week on another positive note with net inflows of $997.70 million and demand reached its highest level in six months. Undoubtedly, this ETF has marked a turning point for Bitcoin and other cryptocurrencies since the beginning of the year, as it opened up cryptocurrencies to inflows from every side.
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Interestingly, the data shows that retail investors account for the majority of demand for Spot Bitcoin ETFs, accounting for 80% of total assets under management.
Bitcoin ETF Changes the Narrative
According to Bloomberg dataBitcoin ETFs have dominated the ETF landscape in 2024, claiming the top four positions for inflows among all ETFs launched this year. Specifically, of the 575 ETFs introduced so far, 14 of the top 30 are new funds focused on Bitcoin or Ethereum. The most prominent firm is the BlackRock IBIT fund, which has attracted more than $23 billion in inflows this year.
Last week was another example of the Bitcoin Spot ETF’s positive performance, even though the coin consolidated below the $68,000 price level. According to data flow from SosoValue weekly inflows started on a positive note on Monday, October 21, with $294.29 million coming into the fund and ended the week with $402.08 million in inflows on Friday, October 25.
Interestingly, the Spot Bitcoin ETF now holds around 938,700 BTC in the 10 months since its launch and continues to approach the 1 million BTC mark. Although these ETFs have opened the door to institutional investors, latest report from crypto exchange Binance shows that retail investors are the main driver of this surge in demand, accounting for 80% of holdings in the BTC Spot ETF.
Originally intended to give institutional investors access to BTC, Spot Bitcoin ETFs have now become the go-to choice for many individual investors looking to take advantage of the regulatory clarity they offer. Despite this, there has been steady demand on the institutional side, with institutional ownership increasing by 30% since Q1.
Among institutional investors, investment advisors emerged as the fastest growing, with their holdings increasing by 44.2% to reach 71,800 BTC in the quarter.
What’s Next For Bitcoin Spot ETFs?
Thanks to the rapid growth of Bitcoin exchange-traded funds, an impressive 1,179 institutions, including financial giants like Morgan Stanley and Goldman Sachs, have joined the crypto cap table in less than a year. For comparison, Gold ETFs it was only able to attract 95 institutions in its first year of trading.
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The upward trajectory of institutional investment in Bitcoin ready to continue in the future, which bodes well for Bitcoin’s overall price outlook. As these ETFs attract more institutional capital, they are likely to produce secondary effects such as increased BTC dominance, increased market efficiency, and reduced volatility that can significantly benefit the cryptocurrency ecosystem.
At the time of writing, Bitcoin is trading at $67,100.
Featured image from Reuters, chart from TradingView