Bitcoin and Ether ETFs: Strong 2024 Inflows, but What’s the Outlook for 2025?
Bitcoin and Ether ETFs– In 2024, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced remarkable growth, surpassing initial expectations with a staggering $35.66 billion in net inflows. This outpaced early industry estimates, showing the growing institutional interest in Bitcoin. On the other hand, spot Ether ETFs also ended the year on a strong note, amassing net inflows of $349.3 million in the last four trading days, bringing their total to $2.68 billion since launch.
Leading Bitcoin ETFs and Their Performance
The biggest player in the spot Bitcoin ETF space was BlackRock’s iShares Bitcoin Trust ETF (IBIT), which led the way with $37.31 billion in net inflows. Other prominent Bitcoin ETFs include Fidelity’s Wise Origin Bitcoin Fund (FBTC) and ARK 21Shares Bitcoin ETF (ARKB), which saw inflows of $11.84 billion and $2.49 billion, respectively. According to Farside Investors, the total net inflows for Bitcoin ETFs far exceeded initial expectations, surpassing a first-year estimate of $14 billion made by Galaxy Digital’s Alex Thorn.
However, despite the strong start to 2024, Bitcoin ETFs struggled in the latter part of the year. Since December 19, the spot Bitcoin ETFs experienced combined outflows of $1.33 billion. The outflows were largely driven by retail investors, with reports from Binance revealing that nearly 80% of the demand for Bitcoin ETFs came from retail, not institutional investors. The largest outflow occurred on December 24, with IBIT seeing $188.7 million leave.
Industry analysts are optimistic about the future of Bitcoin ETFs. Matt Hougan, Chief Investment Officer at Bitwise, predicts that 2025 will see increased institutional involvement, driven by the launch of more clearinghouses for spot Bitcoin ETF trading. This, in turn, has led to Bitwise’s bullish $200,000 Bitcoin price forecast for 2025, with VanEckalso predicting Bitcoin will top $180,000 in the next year.
Ether ETFs Gain Ground Despite Market Challenges
Ether ETFs also had a strong year, closing 2024 with $2.68 billion in net inflows since their launch on July 23. Farside Investors reports that excluding outflows from the converted Grayscale Ethereum Trust ETF (ETHE), the total inflows for Ether ETFs would increase to $6.29 billion. The leading Ether ETFs include BlackRock’s iShares Ethereum Trust ETF (ETHA), which saw $3.52 billion in net inflows, and Fidelity’s Ethereum Fund (FETH), which attracted $1.56 billion.
The Grayscale Ethereum Mini Trust ETF (ETH), which has lower fees, also performed well, finishing the year with $608.1 million in net inflows, while Bitwise’s Ethereum ETF (ETHW) surpassed the $400 million milestone.
Despite the strong performance of Ether ETFs in 2024, Ether has underperformed relative to Bitcoin and Solana (SOL). However, analysts like Hougan and Ryan Rasmussen, Head of Bitcoin Research at Bitwise, expect Ethereum to bounce back in 2025, driven by increased activity on Ethereum Layer 2 solutions, more spot Ether ETF flows, and what they describe as “massive growth” in stablecoins and real-world asset tokenization. Bitwise has set a $7,000 target for Ether in 2025, reflecting their optimistic view on the future of Ethereum.
The Future of Bitcoin and Ether ETFs
The performance of spot Bitcoin and Ether ETFs in 2024 signals a growing institutional interest in digital assets, especially Bitcoin, as more funds flow into these investment products. The potential for continued growth is tied to increased institutional involvement, technological advancements in the Ethereum ecosystem, and overall positive macroeconomic conditions.
However, the late-year outflows from Bitcoin ETFs and market volatility show that there are risks involved for retail investors, who have thus far driven the demand. Industry analysts remain optimistic about the future, particularly with the increased infrastructure development around Bitcoin ETFs and Ethereum’s continued evolution.
As both Bitcoin and Ether continue to shape the digital asset landscape, the coming year could bring further exciting opportunities for those investing in these innovative financial products.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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