Spot Bitcoin ETF Inflows Dwarf Gold ETFs’ First Year: Binance Research

Less than a year after their launch, spot Bitcoin ETFs have recorded unprecedented growth, boosting investors’ interest and demand for the largest cryptocurrency.

A recent report by Binance Research, the research arm of the global cryptocurrency exchange, revealed that bitcoin ETFs have accumulated over 938,000 BTC, worth $63.3 billion. This figure represents 4.5% of the total circulating supply of bitcoin. Adding the amount held in other similar funds drives the figure to 1.1 million BTC, approximately 5.2% of the circulating supply.

Notably, a chunk of the total assets under management (AUM) in these funds had been amassed within the first few months of their launch. However, the report noted that inflows into the funds have remained steady throughout the year, indicating sustained investor interest.

Bitcoin ETFs Attract $18.9B Inflows

Spot Bitcoin ETFs have fueled demand for the crypto asset over the past few months. As a result, the funds have consistently removed an average of 1,100 BTC per day from the market.

Additionally, the funds have recorded positive flows in 24 out of 40 weeks, with the value of inflows surpassing outflows by a wide margin. Over the past 10 months, Bitcoin ETFs have received cumulative flows exceeding $21 billion.

Per the report, Bitcoin ETF flows have surpassed the early performance of the first Gold ETF, which currently has an AUM of $130.9 billion. The Gold ETF was considered a huge success when it recorded $1.5 billion in inflows within the first year of its launch in 2005. However, Bitcoin ETF flows have smashed that record, hitting over $21 billion in just 10 months.

BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC account for approximately 84% of the total ETF market. Inflows into IBIT constitute a bulk of the net ETF inflows to date.

Retail Investors Drive Demand

The report pointed out that retail investors account for 80% of bitcoin ETF demand. While institutional demand is lower, it has shown consistent growth in the past few months, up 7.9% since Q1.

The number of institutional investors has also increased, currently at over 1,200. Top institutional holders include investment advisors and hedge funds, as well as major banks and pension funds like Goldman Sachs, Morgan Stanley, and the State of Wisconsin Investment Board.

Institutional interest in Bitcoin ETFs is expected to increase in the coming years as investors become more comfortable with digital assets. This is especially true since bitcoin’s correlation with the S&P 500 has continued to rise since early 2024, which highlights a change in investor sentiment toward BTC as a safe-haven asset.

Unfortunately, while Bitcoin ETFs have thrived, their Ethereum counterparts have received little attention. The funds have recorded over $103.1 million in outflows, with negative flows in 8 out of 11 weeks since launch.