In less than a year since their launch, spot Bitcoin ETFs have experienced unprecedented growth, sparking increased interest and demand for the largest cryptocurrency. According to a recent report by Binance Research, the research arm of the global cryptocurrency exchange, these ETFs have accumulated over 938,000 BTC, equivalent to $63.3 billion. This represents 4.5% of the total circulating supply of bitcoin. When combined with the amount held in other similar funds, the figure reaches 1.1 million BTC, approximately 5.2% of the circulating supply. Notably, a significant portion of the total assets under management (AUM) in these funds was amassed within the first few months of their launch. However, the report also noted that inflows into the funds have remained steady throughout the year, indicating sustained investor interest. The popularity of spot Bitcoin ETFs has driven demand for the crypto asset in recent months, with the funds consistently removing an average of 1,100 BTC per day from the market. In addition, the funds have recorded positive flows in 24 out of 40 weeks, with the value of inflows surpassing outflows by a wide margin. Over the past 10 months, Bitcoin ETFs have received cumulative flows exceeding $21 billion. This is a significant achievement, as it surpasses the early performance of the first Gold ETF, which currently has an AUM of $130.9 billion. The Gold ETF was considered a huge success when it recorded $1.5 billion in inflows within the first year of its launch in 2005. However, Bitcoin ETF flows have smashed that record, hitting over $21 billion in just 10 months. The top three players in the ETF market are BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC, which together account for approximately 84% of the total ETF market. IBIT has received the bulk of the net ETF inflows to date. The report also highlighted that retail investors make up 80% of bitcoin ETF demand, while institutional demand is lower but has shown consistent growth in the past few months, up 7.9% since Q1. The number of institutional investors has also increased, currently at over 1,200. Top institutional holders include investment advisors, hedge funds, and major banks and pension funds such as Goldman Sachs, Morgan Stanley, and the State of Wisconsin Investment Board. As investors become more comfortable with digital assets, institutional interest in Bitcoin ETFs is expected to increase in the coming years. This is especially true since bitcoin’s correlation with the S&P 500 has continued to rise since early 2024, highlighting a shift in investor sentiment towards BTC as a safe-haven asset. Unfortunately, while Bitcoin ETFs have thrived, their Ethereum counterparts have received little attention. The funds have recorded over $103.1 million in outflows, with negative flows in 8 out of 11 weeks since launch. SPECIAL OFFER (Sponsored) Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive $600 in BNB, the native token of the Binance exchange, for free.
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