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Investors learned one year ago today that U.S. spot bitcoin ETFs have finally gotten a hold of... Proceed to launchwith these products arriving on the market the next day.
We now have 12 months of data to refer to.
It was an interesting read I published my article The morning of January 10, 2024, which is summarized What led to This teacher.
The Winklevoss twins filed for a Bitcoin ETF in 2013; BTC Futures Funds Hit US Market in 2021; Supreme Education Council Suppress grayscale GBTC conversion The following year – and the company after that Sue the regulator; BlackRock's proposal catches the eye In mid-2023; Finally, Legal win for Grayscale.
Expectations seeking to determine the size of demand for it spread after that, as many expected Bitcoin ETFs to rise. Breaking records.
Spoiler: They did.
Bloomberg Intelligence analyst James Seyphart spoke about his forecast for net inflows of $15 billion in the first year of last year. He told me that these were higher expectations than most in the world of TradFi research. However, it is lower than some of the expectations found in the cryptocurrency space.
“However, even issuers who expected these releases to be a hit did not expect them to do so well,” Seyphart told me. “They now hold over 1.13 million Bitcoin and have $100 billion in assets after generating nearly $38 billion in net inflows in their first year – more than double what we thought would be a very successful launch.”
In its forecast for the year 2025 a reportBitwise claimed that Bitcoin ETFs would do just that Attract more flows in 2025 than in 2024.
Others have a more nuanced perspective.
After products took in nearly $16 billion in assets during the fourth quarter alone, an influx of another $15 billion in the year (matching his initial forecast for the first year) seems like a "foregone conclusion assuming the economy avoids a recession," Seyphart noted.
Although he did not share an exact forecast for 2025 inflows, Seyvart believes bitcoin ETFs will grow to three times the size of gold ETFs over the next three to five years.
The largest bitcoin ETF – BlackRock's iShares Bitcoin Trust (IBIT) – far surpassed the iShares Gold Trust (IAU) in assets under management – ~$52 billion to ~$33 billion. IBIT is still chasing category-leading SPDR Gold Shares (GLD), which has nearly $74 billion under management.
Seyfart highlighted different use cases for Bitcoin: a hedge against currency depreciation, as well as a form of “hot sauce and satellite positions” in a portfolio given the volatility of the asset.
He and Nina Mishra, director of ETF research at Zacks Investment Research, also pointed to more wire companies greenlighting bitcoin ETFs in 2025 as a potential catalyst. He remembers Morgan Stanley move In August?
Meanwhile, BlackRock and Fidelity - two stalwarts in the asset management industry - are set to continue... “Legitimizing” BitcoinIt cannot be overlooked,” Mishra added.
“However, a lot will depend on Bitcoin’s performance, as ETF flows tend to follow performance trends,” she said.
Besides macro factors, the key factor in Bitcoin's price in 2025 is set to be whether (and how quickly) it is promised. Regulatory progress of cryptocurrencies is fulfilled.
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