Since their launch at the beginning of 2024, U.S. Bitcoin spot ETFs have quickly become a hot topic in financial markets and the cryptocurrency sector. With advantages such as simplicity of operation and regulatory protection, this product not only provides ordinary users with a convenient channel to enter the cryptocurrency world but also promotes the mainstreaming of cryptocurrencies. In this issue, TRON Knowledge Bureau will help you understand the market scale and impact of Bitcoin spot ETFs.
As is well known, an ETF is an investment fund traded on stock exchanges that typically holds a variety of assets, such as stocks, commodities, or cryptocurrencies, aiming to track the performance of a specific index or asset. A Bitcoin spot ETF, on the other hand, is based on Bitcoin as the underlying asset, with its performance linked to the real-time value of Bitcoin. When users purchase a Bitcoin spot ETF, it is equivalent to indirectly holding Bitcoin without the need to personally manage, store, or purchase actual Bitcoin. Besides the United States, Hong Kong also approved Bitcoin spot ETFs in April 2024. Although there are certain management fees and commissions to be paid, this method is still more convenient than directly buying and selling Bitcoin, especially suitable for ordinary users entering the cryptocurrency market.
Since the U.S. Securities and Exchange Commission (SEC) approved the first Bitcoin spot ETFs for listing on January 10, 2024, their market performance has been particularly impressive. According to SoSoValue data, as of December 30, 2024, the total net asset value of U.S. Bitcoin spot ETFs has reached $106.24 billion, with a cumulative net inflow of approximately $35.24 billion, highlighting users' strong recognition of this emerging product. Additionally, within the 51 weeks since the launch of Bitcoin spot ETFs, there have been net inflows in 35 weeks, demonstrating the stability and sustainability of market demand.
Among these ETFs, the five with the largest assets under management are:
Among them, BlackRock's IBIT leads the market with an asset management scale of $52.15 billion, occupying a dominant position, followed closely by Grayscale's GBTC and Fidelity's FBTC, with the three together holding 85% of the market share.
In terms of user demographics, participants in Bitcoin spot ETFs are becoming increasingly diverse. According to a report released by Binance Research at the end of October, as of October 10, 2024, non-institutional holdings accounted for about 80% of the assets under management of Bitcoin spot ETFs, indicating a high level of interest from retail investors in this product. At the same time, institutional participation has also significantly increased, with over 1,200 institutions having invested in Bitcoin spot ETFs since the report was published, marking an increase of about 30% since the first quarter.
Among them, Goldman Sachs is a typical representative of traditional financial institutions. According to its submitted 13F filing, as of the end of the third quarter, Goldman Sachs' holdings in Bitcoin spot ETFs had surpassed $710 million. This further reflects the increasing importance that traditional financial institutions place on this asset, while also attracting a broader inflow of funds.
The sustained popularity of Bitcoin spot ETFs has not only attracted more users but also brought numerous impacts to the cryptocurrency market:
First, it significantly enhances Bitcoin's market capitalization share. According to CoinMarketCap data, as of December 30, Bitcoin's market capitalization share is approximately 56.7%, a significant increase from 50.3% at the beginning of the year, further consolidating its core position in the cryptocurrency market.
Secondly, Bitcoin spot ETFs have effectively promoted the improvement of market efficiency. The Binance Research report shows that after the launch of Bitcoin spot ETFs, the trading volume of BTC in the spot and derivatives markets has significantly increased, and the open interest has also risen noticeably. Notably, Bitcoin spot trading volume has repeatedly hit historical highs, making 2024 a record-breaking year. It can be said that the SEC's approval of Bitcoin spot ETFs has laid the foundation for the prosperity of the Bitcoin market this year. With the increase in trading volume, the market pricing of Bitcoin will also become more efficient.
Additionally, the participation of liquidity providers has optimized market depth and improved the ability to handle large orders. Currently, the total holdings of U.S. Bitcoin spot ETFs amount to approximately 1.129 million BTC, accounting for about 5.7% of the current total supply of Bitcoin. The continued decline in Bitcoin's volatility also indicates that the market is evolving towards greater stability and maturity.
Overall, the launch of Bitcoin spot ETFs is not only an important milestone for the cryptocurrency industry but also lays the foundation for its further integration into the traditional financial system. As the cryptocurrency market continues to mature and its popularity increases, Bitcoin spot ETFs are expected to attract more users and lead cryptocurrencies toward broader development opportunities.
