The launch year of US-listed Bitcoin and Ether ETFs saw record-breaking inflows, signaling robust demand for these cryptocurrency investment vehicles.
BTC ETFs’ Performance
According to Farside Investors, spot Bitcoin (BTC) ETFs generated $35.66 billion in new investments this year, which was higher than expected. The iShares Bitcoin Trust ETF by Blackrock was the most popular, with inflows of $37.31 billion.
Wise Origin Bitcoin Fund was second with $11.84 billion, followed by AR K 21Shares Bitcoin ETF with $2.49 billion. The top three spots were rounded off with the Bitwise Bitcoin ETF, which had $2.19 billion.
CypherMindHQ.com Artificial Intelligence Crypto Trading System - Surpass the competition with this cutting-edge AI system! Utilize the prowess of innovative algorithms and amplify your crypto trading strategies with CypherMindHQ. Learn more today!
The forecast of $14 billion in inflows, shared by Galaxy Digital Research, was surpassed by these ETFs, highlighting the market’s appetite for the leading digital asset. However, these firms’ total outflows reached $1.33 billion from Dec. 19 to Dec. 27.
On Dec. 24, IBIT recorded the largest single day of outflows — $189 million. According to Binance’s Oct. 2024 report, 80% of the demand for spot BTC ETFs came from retail investors.
However, Matt Hougan, a crypto ETF expert, predicts more involvement from institutions in 2025. He believes there will be an expansion in clearing houses for Bitcoin ETFs next year.
Spot Ether ETFs Defied Odds
Meanwhile, spot Ether ETFs, which debuted in mid-2024, finished the year with $1.68 billion in net inflows. The BlackRock iShares Ethereum Trust ETF (ETHA) is ahead of others with $3.52 billion.
Fidelity’s Ethereum Fund (FETH) came in second with $1.56 billion. The Grayscale Ethereum Mini Trust ETF (ETH) recorded an inflow of over $608.1 million, while the Bitwise Ethereum ETF (ETHW) surpassed the $400 million threshold.
Analysts believe Ether ETFs will likely become popular in 2025 owing to the growth of Ethereum Layer 2 scaling solutions and the development of real-world asset tokenization. Ethereum trailed Bitcoin and Solana in 2024, but Bitwise analysts expect a strong performance in 2025 when Ether could trade at $7000.
This year’s performance of BTC and Ether ETFs in the US sets the stage for more institutional participation in 2025 and a greater understanding of crypto assets. Per Bitwise’s observations, institutional demand would increase further, and BTC’s price could peak at $200,000 by 2025.
Conversely, VanEck puts its 2025 price target for BTC at $180,000.
CypherMindHQ.com Artificial Intelligence Crypto Trading System - Outpace the competition with this high-end AI system! Leverage the capabilities of progressive algorithms and enhance your crypto trading performance with CypherMindHQ. Learn more today!
US Government Retains Bitcoin Stockpile
Meanwhile, Alex Thorn, who heads Galaxy Research, has hinted that the US would not buy BTC in 2025. The country already owns over 183,880 BTCs, worth over 17 billion dollars based on the asset’s current price.
He made these claims in his latest report, noting the government’s commitment to securing its current portfolio. The government has been aiming to develop a strategic Bitcoin reserve, which suggests increased interest in crypto.
If the proposed Bitcoin Act 2024, spearheaded by Senator Lummis, is passed, the government intends to purchase 200,000 BTCs every five years. Thus, the government would have acquired one million BTCs in about twenty years.
Experts Warn About Bitcoin ETFs
Furthermore, analysts project that by 2025, up to five nation-states and five Nasdaq 100 companies could add Bitcoin to their wealth funds or balance sheets. But, Shigeru Ishiba, a member of the upper house of the Japanese parliament who spoke on the development, was skeptical about the company adopting Bitcoin as a reserve currency.
On the contrary, Changpeng Zhao, the founder of Binance, expressed optimism about the adoption of BTC reserves by smaller countries after China’s initial skepticism.
Meanwhile, popular author Robert Kiyosaki defended Bitcoin’s self-custody for its investors while advising against institutional products like ETFs. According to him, owning BTC directly rather than any financial organization is the only means to protect oneself from geopolitical turmoil.
This stance complements popular entrepreneur Vivek Ramaswamy’s critique of the ESG-oriented approach that companies like BlackRock take. He describes this approach as worrying stakeholders more than providing financial freedom.
