In 2024, a remarkable achievement was reached by cryptocurrency funds managed by prominent financial institutions such as BlackRock, Fidelity, and Grayscale. According to CoinShares, these funds saw a staggering $44.2 billion in net inflows, surpassing the previous annual record of $10.5 billion set in 2021. This significant increase points to a massive upswing in institutional investment in digital assets.
Investment products tied to Bitcoin dominated the inflows, accounting for a total of $38 billion, or 29% of all Bitcoin assets under management. A significant portion of this, approximately $35 billion, was attributable to U.S. spot Bitcoin ETFs, which experienced a net inflow of funds throughout the year.
In the latter part of 2024, Ethereum-backed products experienced a resurgence, recording an impressive $4.8 billion in total net inflows for the year. Notably, US spot Ether ETFs attracted $2.6 billion during this period. Meanwhile, Ripple (XRP) was trading at $2.45 with a daily volatility of 3.5%, boasting a market cap of $140.66 billion and a 24-hour volume of $4.51 billion. Similarly, Solana (SOL), priced at $222.1, exhibited a 4.4% daily volatility, maintaining a market cap of $107.34 billion and a 24-hour volume of $3.89 billion. Additionally, these cryptocurrency funds garnered significant attention, receiving $438 million and $69 million in investments, respectively.
Despite a slight dip from 2023 levels, short-term Bitcoin investment products successfully attracted approximately $108 million, proving that even bearish strategies have their niche in a year characterized by escalating prices. Strikingly, the introduction and deployment of the first U.S. spot Bitcoin and Ethereum ETFs played a substantial role in this growth, pulling in a combined total of $44.4 million in investments.
However, while there were significant annual outflows from Canadian and Swedish crypto funds totaling $707 million and $682 million respectively, these funds are seeing a shift towards U.S.-based products or capitalization of gains. Nevertheless, the crypto industry’s overall momentum continues to be robust.
What’s Next for Crypto Funds?
As a researcher examining financial trends in 2025, I find it noteworthy that digital asset investment products have had a robust beginning to the year. For example, U.S. spot Bitcoin ETFs have recorded $585 million in net inflows since the start of the year. Remarkably, on January 3 alone, there was an influx of $908 million, indicating a positive outlook that may shape the remainder of the year.
As we move into a new year, experts in the industry anticipate significant advancements for crypto funds and exchange-traded funds (ETFs). Last week, well-known ETF analyst Nate Geraci shared his top predictions, which include improvements to ETF procedures specifically for Bitcoin and Ethereum ETFs, such as in-kind creation and redemption. Additionally, Geraci expects the approval of ETFs based on Solana within a short timeframe. Furthermore, he anticipates the launch of Bitcoin-based ETFs linked to reverse-capitalization-weighted S&P 500 indices within the next two months.
Prediction…
Reverse cap weighted S&P 500 ETF denominated in bitcoin.
We will see this filing in next 2mos.
— Nate Geraci (@NateGeraci) January 4, 2025
Analysts predict a significant increase in institutional investment in cryptocurrencies by 2025, potentially pushing Bitcoin prices to unprecedented levels due to increased demand from sovereign wealth funds, pension funds, and other major investors. A report published in December by Sygnum Bank warned of “demand shocks” that could result from this rise.
Recently, research firm Bernstein projected that the price of BTC could reach $102,477 by year-end. This digital currency has a daily volatility of 4.5%, currently boasts a market capitalization of $2.03 trillion, and has seen a 24-hour trading volume of $43.12 billion.
By the end of this year, ETF inflows could surpass $70 billion—more than double the $35 billion recorded in 2024.
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2025-01-06 19:42