As a seasoned researcher who has witnessed the evolution of financial markets for nearly two decades, I must admit that the rapid growth and success of Bitcoin ETFs has left me quite astonished. Having closely followed the early stages of gold ETFs, it’s fascinating to see how Bitcoin has not only outperformed them in terms of institutional interest but also surpassed traditional assets like gold.
A recently released study from Binance, the leading global cryptocurrency exchange, indicates that Bitcoin ETFs have surpassed early gold ETFs when it comes to attracting institutional attention and adoption.
Based on information provided to Coinspeaker, US-listed Bitcoin Exchange Traded Funds (ETFs) have seen a net inflow of approximately 312,500 Bitcoins, equivalent to around $18.9 billion. This significant accumulation happened within ten months following the SEC’s approval in January 2024. In contrast, gold ETFs managed to gather around $1.5 billion in a shorter time frame of less than one year.
Bitcoin ETFs Outshines Early Gold Funds
Speaking about adoption, Bitcoin truly embodied its title as the pioneering cryptocurrency by amassing a staggering $1.34 trillion in market worth. Initially, there was hesitation among institutions regarding the acceptance of Bitcoin ETFs; however, this trend eventually shifted, leading to their surpassing of conventional assets such as gold.
According to Binance’s findings, over 1200 financial entities have invested in these funds, whereas during the initial year of Gold ETFs, just 95 corporations chose to invest in those financial products.
80% of the demand for Bitcoin ETFs comes from non-institutional investors, and while institutional investments have increased by 30% since Q1 2024, it’s worth noting that investment advisors experienced the most significant growth, with their holdings increasing by 44.2%, amounting to approximately 71,800 Bitcoin.
Although we’ve made significant strides, it might be a few more years before Bitcoin ETFs are widely available for use by banks, brokerage firms, and financial consultants across the board.
At the moment, Exchange Traded Funds (ETFs) that deal with Bitcoin spots make up approximately 26.4% of the average daily Bitcoin spot trading volume, reaching as high as 62.6%. These ETFs have significant effects on the market, such as increasing Bitcoin’s influence, enhancing overall efficiency, and lessening its price volatility.
Despite being in their initial phases, Bitcoin ETFs are stimulating a wider user base by demonstrating liquidity and market acceptance. This is drawing venture capital, increasing on-chain interactions, and championing financial inclusion within the market.
Bitcoin ETFs See 24 Weeks of Positive Inflows
Compared to other cryptocurrency exchange-traded funds (ETFs), particularly those based on Ethereum, Bitcoin ETFs have shown superior performance since they entered the market in January. To date, these Bitcoin ETFs have accumulated approximately 938,700 Bitcoins, which translates to a staggering value of more than $63.3 billion. According to Binance’s findings, this amassed Bitcoin represents around 5.2% of the total supply of Bitcoins in circulation, taking into account other similar products as well.
For the past 40 weeks, these funds have consistently attracted investments, with positive inflows occurring in 24 out of those weeks. This trend has been significant enough to keep Bitcoin ETFs active, on a regular basis withdrawing approximately 1,100 Bitcoins per day from the market circulation.
Binance’s study found that BlackRock’s IBIT and Fidelity’s FBTC are rapidly expanding Exchange-Traded Funds (ETFs), as indicated by investor interest. These products were among the top-managed assets (AUM) in the list of 2,000 ETF launches this decade.
Furthermore, there’s been a notable rise in the link between Bitcoin and the S&P 500 since early 2024, hinting at a closer alignment with conventional finance (TradFi) and demonstrating shifting investor views on Bitcoin as it becomes both an investment for growth and a safeguard against economic instability.
The research also touches on real-world assets (RWAs) as the next driver of institutional interest in on-chain activities.
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2024-10-25 17:12