Forecast: Bitcoin ETF inflows in 2025 will exceed those in 2024
When the U.S. spot Bitcoin ETF launches in January 2024, ETF experts predict that the product group will attract between $5 billion and $15 billion in inflows during the first year. In fact, it exceeded the upper end of that expected range within the first six months. Since its launch, these record-breaking ETFs have attracted $33.6 billion in inflows. Inflows in 2025 are expected to surpass this figure. There are three supporting reasons for this forecast:
1. The first year is typically the slowest year for ETFs
The best historical analogy for Bitcoin ETFs is the launch of gold ETFs in 2004
That year, gold ETFs attracted $2.6 billion in inflows, which was exciting
But the following years saw the following (numbers adjusted for inflation):
Year 2: $5.5 billion
Year 3: $7.6 billion
Year 4: $8.7 billion
Year 5: $16.8 billion
Year 6: $28.9 billion
The key point is that inflows in the second year exceeding the first year aligns with the development pattern of gold ETFs; a decrease in inflows would be unusual.
2. Major investment banks are joining
The world's largest investment banks (including Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo) have yet to unleash the power of their wealth management teams
These financial advisors currently have basically no access to these products
This is expected to change in 2025
The trillions of dollars managed by these companies will begin to flow into Bitcoin ETFs.
3. Investors are gradually increasing allocations—1% turning into 3% is becoming a new trend
Bitwise has observed a noticeable pattern over the past seven years as it has helped investment professionals enter the cryptocurrency market:
Most investors start with small allocations and then gradually increase over time
It is expected that investors purchasing Bitcoin ETFs in 2024 will largely double down in 2025.