The potential approval of a U.S.-sanctioned spot Bitcoin exchange-traded fund (ETF) could significantly outgrow the current $50 billion market for cryptocurrency-related ETFs.
According to recent data from BitMEX Research, the global market for cryptocurrency exchange-traded products (ETPs) encompasses around 163 products, managing a total of $50.6 billion in assets. This array includes both spot and futures funds, mainly tracking Bitcoin and Ethereum. Grayscale’s Bitcoin Trust, striving to transition into a spot ETF, is the largest among these ETPs.
Market experts anticipate that the approval of a spot Bitcoin ETF, which could occur as early as January 10 according to the SEC, might potentially double the investments in cryptocurrency ETPs. On December 14, Bitwise, a cryptocurrency investment firm, projected that spot Bitcoin ETFs could become the most successful ETFs ever, amassing about $72 billion in assets within five years – twice the current market size.
Van Eck, a global fund manager, presented a more conservative estimate, predicting around $2.4 billion inflow into Bitcoin spot products in the first quarter of 2024.
Although the U.S. has not yet approved spot Bitcoin ETFs, such products are already available in several other countries, including Canada, Australia, and Germany. The growing interest in spot Bitcoin ETFs is part of a larger trend of increasing institutional investment in cryptocurrency products.
ETF research firm ETFGI reported on December 21 that globally listed crypto ETFs have seen $1.6 billion in net inflows year-to-date, with November alone accounting for $1.31 billion. This amount nearly doubles the $750 million in net inflows into cryptocurrency ETPs in 2022. Among these, the top 20 cryptocurrency funds attracted the most investment, with a combined $1.3 billion in inflows in 2023.
The ProShares Bitcoin Strategy ETF (BITO), launched in October 2021 during the cryptocurrency boom, recorded the highest individual inflows, with an additional $278.7 million in 2023.
