Investopedia / Photo illustration by Alice Morgan / Getty Images
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Spot bitcoin ETFs, which launched a year ago, made it easy 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 spot bitcoin ETFs has led to the approval of spot ether ETFs, and we could soon see approvals for other crypto assets as well.
In their first full year of trading, spot bitcoin exchange traded funds may have fundamentally changed the way investors view cryptocurrency investments.
Spot bitcoin ETFs started trading January 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, while investors poured billions into ETFs.
Here’s what’s happened since the launch of spot bitcoin ETFs.
Spot bitcoin ETFs have made it easy for investors to gain exposure to the cryptocurrency.
Typically, if you want to buy bitcoin, you will need cryptocurrency wallet and you need to buy a token from a cryptocurrency exchange. If you opt for a bitcoin ETF instead, you can buy a product using your brokerage account as you would for any other ETF.
Investors appreciated that ease and poured billions into spot bitcoin ETFs. This enthusiasm is shared by both retail and institutional investors, even traditional Wall Street firms and hedge funds. get 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 exceeding $37 billion to date. The fund has seen tremendous growth with over $52 billion in assets as of January 9 significantly surpassing $33 billion in assets for iShares’ 20-year gold ETF (IAU), and approaching SPDR Gold shares (GLD)—the largest gold ETF with more than $75 billion in assets.
Spot bitcoin ETFs hold the cryptocurrency as an underlying asset. So the more people put money into an ETF, the more bitcoins the ETF has to buy. That demand helped push bitcoin prices to record highs last year.
Bitcoin was trading near $46,000 on January 10, when it Securities Commission gave his approval to start trading bitcoin ETFs. Its price dipped below $40,000 in the first few weeks after the ETFs began trading, but then recovered to set a new high above $73,000 in March ahead of bitcoin halving.
