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Key Takeaways
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Spot bitcoin ETFs, which launched a year ago, made it easier for investors to gain exposure to the cryptocurrency.
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Investors poured billions into bitcoin ETFs, which helped push bitcoin prices to multiple all-time highs during 2024.
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The success of the spot bitcoin ETFs led to the approval of spot ether ETFs, and approvals could soon be seen for other crypto assets as well.
In their first full year of trading, spot bitcoin exchange-traded funds may have fundamentally altered the way investors view cryptocurrency investments.
Spot bitcoin ETFs began trading on Jan 11, 2024, opening up the crypto market to a wider range of investors and paving the way for more such products. The launch also played a role in boosting the price of bitcoin (BTCUSD) to a series of record highs, as investors poured billions into the ETFs.
Here's what's happened since the launch of spot bitcoin ETFs.
ETFs Made Investing In Bitcoin More Accessible
Spot bitcoin ETFs made it easier for investors to gain exposure to the cryptocurrency.
Typically, if you wanted to buy bitcoin, you would need a cryptocurrency wallet and need to buy the token off a cryptocurrency exchange. Instead, if you opt for a bitcoin ETF, you can buy the product using your brokerage account like you would for any other ETF.
Investors have appreciated that ease and poured billions into spot bitcoin ETFs. That enthusiasm is shared by retail and institutional investors alike, with even traditional Wall Street firms and hedge funds getting in on the action.
Bitcoin is often referred to as digital gold, and bitcoin ETFs are quickly gaining popularity over gold ETFs.
Blackrock's iShares Bitcoin Trust (IBIT) is one of the more popular ETFs, with net inflows so far exceeding $37 billion. The fund has seen tremendous growth with assets at over $52 billion as of Jan. 9, significantly surpassing the $33 billion in assets for the iShares' 20-year old gold ETF (IAU), and closing in on SPDR Gold Shares (GLD)—the largest gold ETF with assets over $75 billion.
Bitcoin ETFs, Halving, Trump Win Drove Price Rally
Spot bitcoin ETFs hold the cryptocurrency as the underlying asset. So as more people put money into the ETF, the ETF has to buy more bitcoin. That demand helped drive bitcoin prices to record highs last year.
Bitcoin was trading close to $46,000 on Jan. 10, when the Securities and Exchange Commission gave its approval for bitcoin ETFs to begin trading. Its price fell below $40,000 in the first few weeks after the ETFs started trading, but then recovered to establish a new high of over $73,000 in March ahead of the bitcoin halving.