Bitcoin ETFs (exchange-traded funds) finished 2024 with their worst weekly performance since September. Yet, the ETF industry still recorded the best year for interest in crypto-based investment products.
Positive Momentum Amidst Challenges
Bitcoin ETFs saw extreme outflows during the week, with three red days between December 23 and December 27. Total outflows during the period were $862.69 million, with a net flow of -$387.54 million for the week.
Fidelity’s FBTC and BlackRock’s IBIT noted most of these losses, with outflows of $208 million and $188.7 million, respectively. In contrast, the ARKB from ARK 21Shares recorded inflows of $186.9 million over the same period.
Nevertheless, the broader market sentiment has remained bearish, as many ETFs’ net assets declined. While Bitcoin ETFs had a torrid week, there were some positive moments.
On Christmas Day, Bitcoin popped back into the $98,000-$99,000 range. This rise brought $475.5 million of inflows into BTC investment products — their best single-day performance since the start of this negative run.
This performance capped a year in which Bitcoin ETFs outperformed market expectations. In 2024, the ETFs recorded inflows of $35.65 billion, a sign of their growing acceptance among traditional investors.
BlackRock’s Bitcoin ETF Breaks Records
In 2024, BlackRock’s iShares Bitcoin Trust, IBIT, accumulated over $50 billion of AuM in 11 months. Thus, analysts called it the most successful ETF launch in history.
IBIT grew at a rapid pace, outpacing the collective growth of over 50 Europe-focused ETFs, most of which have been in existence for longer periods—most over two decades. James Seyffart, an analyst at Bloomberg Intelligence, indicated that IBIT took the least time among all the ETFs to achieve its milestones, regardless of the asset class.
These ETFs’ phenomenal growth helped extend Bitcoin’s price to surpass $100,000 for the first time, including IBIT’s $11 trillion in assets under management. The asset manager was also at the forefront in terms of inflows, with $37.31 billion of the $35.66 billion total net inflows that US spot Bitcoin ETFs saw in 2024.
Bitcoin ETFs vs. Gold ETFs
The potential for BlackRock’s IBIT to challenge gold ETFs has only been debated. While gold ETFs such as SPDR Gold Shares retain a market size of 274 billion dollars, they noted heavy outflows during the second half of the year.
Some analysts believe it could even surpass gold ETFs someday when Bitcoin’s price surges and institutional acceptance increases. Nate Geraci shared a comparative study between Bitcoin ETFs and gold ETFs, underlining the steep rise of Bitcoin-focused products.
Gold ETFs took several years to grow big since their inception in 2004, while Bitcoin ETFs have already marked important milestones in less than a year.
The Road Ahead for Crypto ETFs in 2025
Industry experts predict a transformative year for crypto ETFs in 2025. Franklin Templeton, a leading investment firm, forecasts that the US will spearhead crypto innovation with favorable ETF regulations.
The firm anticipates that clearer regulations and growing institutional interest will drive the convergence of traditional finance and crypto. The firm also believes stablecoin regulatory frameworks will unlock further growth.
It also predicts the increased adoption of tokenized assets and stablecoins as major drivers of decentralized finance (DeFi) expansion. Additionally, Franklin Templeton envisions countries starting Bitcoin reserves and positioning BTC as a global financial asset.
Resilience and Growth Potential for Bitcoin ETFs
Despite challenges related to regulatory uncertainty and market volatility that have been observed in Bitcoin ETFs, these investment products are likely to shape the future of finance. The ability to attract substantial inflows this year and reach important milestones proves the importance of Bitcoin ETFs to the investment landscape.
Franklin Templeton also predicts that AI agents will leverage blockchain for transparent and efficient on-chain transactions and portfolio management.
This fusion of AI and crypto could revolutionize multiple industries, including logistics and the Internet of Things (IoT). However, the crypto sector will still struggle with technological underdevelopment, regulatory uncertainty, and security vulnerabilities.
