Looking back (and ahead) a year after bitcoin ETF approval

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Investors learned one year ago today that US spot bitcoin ETFs finally had the go-ahead to launch, with those products hitting the market the following day.

We now have 12 months of data to look back on.

It was fun reading my piece published the morning of Jan. 10, 2024, which recapped what led to that milestone.

The Winklevoss twins filing for a bitcoin ETF in 2013; BTC futures funds hitting the US market in 2021; the SEC blocking Grayscale’s GBTC conversion the following year — and the firm then suing the regulator; BlackRock’s head-turning proposal in mid-2023; and, finally, Grayscale’s legal win.

Predictions seeking to quantify the demand for these then proliferated, with many expecting the bitcoin ETFs to shatter records.

Spoiler: They did.

Bloomberg Intelligence analyst James Seyffart reflected on his $15 billion year-one net inflow expectation from a year ago. These were higher expectations than most in the TradFi research world, he told me. Yet lower than some projections from those in the crypto space.

“Still, even issuers who expected these to be blockbuster hits did not expect them to do this well,” Seyffart told me. “They now hold over 1.13 million bitcoin and have $100 billion in assets after taking in almost $38 billion of net inflows in their first year — more than double what we thought would have been a very successful launch.”

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In its 2025 outlook report, Bitwise argued that bitcoin ETFs will attract more flows in 2025 than they did in 2024.

Others have a bit more of a nuanced perspective.

Seyffart noted that after the products welcomed roughly $16 billion in assets during Q4 alone, another $15 billion inflow year (matching his initial year-one prediction) seems like “a foregone conclusion assuming the economy avoids a recession.”

Though he didn’t share a precise 2025 inflow projection, Seyffart believes bitcoin ETFs will grow to triple the size of gold ETFs within the next three to five years.

The biggest bitcoin ETF — BlackRock’s iShares Bitcoin Trust (IBIT) — has well surpassed its iShares Gold Trust (IAU) in AUM — ~$52 billion to ~$33 billion. IBIT is still chasing the category-leading SPDR Gold Shares (GLD), which manages roughly $74 billion.

Seyffart highlighted bitcoin’s various use cases: a hedge against currency debasement, as well as a form of “hot sauce and satellite positions” in a portfolio given the asset’s volatility.

He and Neena Mishra, director of ETF research at Zacks Investment Research, also pointed out more wirehouses greenlighting bitcoin ETFs in 2025 as a potential catalyst. Remember Morgan Stanley’s move in August?

Meanwhile, BlackRock and Fidelity — as powerhouses in the asset management industry — are set to continue “legitimizing” bitcoin, which cannot be overlooked, Mishra added.

“However, much will depend on bitcoin’s performance, as ETF flows tend to follow performance trends,” she said.

Alongside macro factors, set to be a major factor on BTC price in 2025 is whether (and how quickly) the promise of crypto regulatory progress is fulfilled.

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