The exchange-traded fund (ETF) landscape has experienced a monumental shift in 2024, with spot Bitcoin and Ethereum ETFs taking the spotlight. Following a significant political shift in the U.S., these crypto ETFs are flooding the market with massive inflows, reflecting a growing institutional embrace of digital assets.
Bitcoin ETFs Set the Tone for 2024
Of the 740 ETFs launched this year, digital asset-focused ETFs have emerged as the dominant players, occupying the top eight spots for inflows. Notably, four of these ETFs track Bitcoin, while two focus on Ethereum.
According to Nate Geraci, President of the ETF Store, the rising popularity of crypto ETFs is reshaping the investment landscape. The surge comes in the wake of the 2024 U.S. elections, where investors are hopeful about crypto-friendly policies under President Donald Trump’s administration, including plans to build a strategic Bitcoin reserve.
Among the most sought-after ETFs are BlackRock’s IBIT and ETHA, both products that have garnered heavy demand. There’s also a notable rise in demand for ETFs that track MicroStrategy (MSTR), a company making waves in the crypto space with its significant Bitcoin holdings. MicroStrategy’s impressive returns this year, coupled with its recent addition to the Nasdaq 100 index, have fueled investor interest in MSTR-focused ETFs.
Sustained Inflows in Crypto ETFs
Despite some fluctuations, crypto ETFs continue to see strong inflows. Between December 23 and 27, Bitcoin ETFs experienced a net outflow of $388 million, likely due to profit-taking and portfolio rebalancing. However, Fidelity’s Bitcoin ETF (FBTC) stood out with a weekly net inflow of $183 million, indicating that certain investors remain confident in Bitcoin’s future.
Bitcoin’s price has also faced some downward pressure, dropping below the $94,000 mark. Crypto analyst Ali Martinez suggests that Bitcoin may rebound, but this is contingent upon the asset maintaining its critical support level at $93,000.
On the Ethereum side, the sentiment is notably bullish. Despite Ethereum’s price hovering around $3,400, data from on-chain analysis and futures positions on BitMEX show a significant amount of optimism. Around 78.3% of traders holding open futures positions on BitMEX are betting on a price increase for Ethereum. Meanwhile, Ethereum ETFs, including BlackRock’s ETHA and Fidelity’s FETH, have reported net inflows of $182 million and $160 million, respectively.
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