Spot Bitcoin ETF Breaks Records in 2024 – Can They Do It Again in 2025?

The approval of the position and the launch of Bitcoin ETFs was one of the most anticipated financial products in recent years. In the year As 2024 closes, $129 billion in total net assets held by ETFs suggests that 2025 will be more constructive.

Exchange-traded funds are financial products that reflect the value of their assets. Regulated, transparent and highly liquid, ETFs give investors access to assets that they can't or don't want to hold directly. This format is particularly attractive for cryptocurrencies, as it provides a regulated, widely accessible and tax-efficient investment option.

Since 2013, the US Securities and Exchange Commission has consistently rejected all Bitcoin ETF applications. Firms such as VanEck, WisdomTree, Bitwise, ARK Invest, 21Shares and Grayscale have faced repeated rejections.

In the year In 2021, the SEC approved futures-based bitcoin ETFs, with ProShares' BITO being the first to launch. At first it successfully reached $1 billion in assets in two days. However, investor interest in BITO has waned rapidly, with AUM falling from a peak of $1.4 billion to $500 million in a year.

This decline coincided with the decline of the broader crypto market, but also reflected the limitations of such a product. Futures-based ETFs, by allowing their owners to profit from Bitcoin price movements, lack the efficiency of spot ETFs that hold actual BTC. Additionally, spot ETFs create immediate buying or selling pressure, which directly affects Bitcoin's price and liquidity.

Earnings show that the BTC ETF was a spectacular victory

In the world of ETFs, spot Bitcoin ETFs have quickly become a phenomenon.

Since its inception, the nine ETFs (not including Greyscale and Hashdex) have broken many industry records. For example, they generated $2.2 billion in business on the first day, while IBIT alone accounted for $1 billion. According to Bloomberg Intelligence, IBIT and FBTC were the only two funds in the ETF universe to pull in more than $3 billion in revenue in their first 20 trading sessions.

It should be noted that a significant portion of these flows come from grayscale flows. With a high fee of 1.5%, Grayscale was uncompetitive compared to newer ETFs that had fees of no more than 0.25%. However, the development was not solely driven by grayscale flow. New money poured into the Bitcoin ETF market, and aggregate inflows rose steadily throughout the year.

In the year By the end of 2024, the success of spot Bitcoin ETFs was undeniable. Although the year was generally strong for ETFs — they broke the previous record for the top 20 funds by 25% in total inflows — the new Bitcoin ETF already stood shoulder to shoulder with long-established veterans.

As Bloomberg ETF analyst Eric Balchunas noted in an X post, BlackRock IBIT finished the year with $37.2 billion in year-to-date flows, one of the top three ETFs. This impressive performance puts IBIT ahead of stalwarts like Vanguard's Total Stock Market ETF ( VTI ), Invesco's Nasdaq-100 Trust ( QQQ ) and State Street's S&P 500 Index fund ( SPY ) — all with decades of track record. Even more impressive, IBIT has achieved this without even celebrating its first anniversary.

Fidelity's FBTC also had a strong showing, earning a respectable 14th place.

Bitcoin ETFs replace gold

Bitcoin is often called digital gold for its ability to store value, and comparing its ETF to gold ETFs provides a compelling perspective. As it turns out, Bitcoin ETFs have not only met expectations – they have exceeded them.

In the year As of November 2024, BlackRock's IBIT has accumulated $33.2 billion in assets, surpassing the company's gold fund IAU, which reached $32 billion. In the year Launched in 2005, the IAU started the year with a $25 billion IBIT, but the latter was captured within a few months.

The trend is not limited to Blackrock. Vettel Lunde, head of research at K33, recently shared a graph showing $129.2 billion worth of Bitcoin ETFs outperforming gold's $128.9 billion. This number includes all ETFs (spot and futures).

According to Bloomberg's Eric Balchunas, narrowing the comparison gives $120 billion for Bitcoin and $125 billion for gold. It's absolutely amazing that a year old product has something as time-tested as gold.

The SpotEther ETF is also making waves

Ether (ETH), the second largest cryptocurrency by market capitalization, entered the ETF space in July 2024 when it launched its first dedicated ETF. However, their performance was very low compared to Bitcoin. Starting with the $8.8 billion Greyscale Ethereum Trust, total AUM has grown modestly to $11 billion annually, TheBlock reports. This suggests that Bitcoin's “digital gold” narrative will continue to be more attractive than Ether's “world computer” and that most investors will need more convincing about Web3's potential.

RELATED: US Bitcoin ETFs' First Year: Growth Exceeds Expectations

Will more crypto ETFs launch in 2025?

Early 2025 shows demand for spot Bitcoin ETFs will remain strong even in a market correction. According to Farside, ETFs have already attracted $1.1 billion in net income year-to-date.

As Bitcoin continues to gain recognition in political and financial circles, this momentum is likely to continue and possibly expand to other cryptocurrencies. For example, the possibility of getting a Solana ETF position has become a hot topic in the crypto community. So Polymarket users assign a 74% chance of SOL ETF in 2025. Ripple's ETF chances are estimated at 70%. VanEck, 21Shares and Canary Capital already offer such ETFs.

Additionally, some Bitcoin promoters may reconsider their position in 2025. Vanguard, one of the world's largest investment management firms, has so far resisted getting into the crypto game.

However, the narrative may change following the departure of the openly anti-Bitcoin CEO Tim Buckley and the arrival of former BlackRock executive Salim Ramji last summer.

Vanguard, a $9 trillion crypto ETF with a broad trading platform, would boost the market significantly if launched.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.