First Year of Gold ETFs Dwarfs Bitcoin ETF Entries: Binance Research

Less than a year after their launch, local Bitcoin ETFs have seen unprecedented growth, increasing investor interest and demand for the largest cryptocurrency.

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

In particular, a part of the total assets under management (AUM) of these funds had been accumulated during the first months of their launch. However, the report notes that inflows into the funds have remained stable throughout the year, indicating sustained investor interest.

Bitcoin ETFs attract $18.9 billion in inflows

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

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

According to the report, Bitcoin ETF flows have surpassed the initial 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 in the first year of its launch in 2005. However, Bitcoin ETF flows have broken that record, reaching more than $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 the IBIT constitute the bulk of net ETF inflows to date.

Retail investors drive demand

The report noted that retail investors account for 80% of demand for bitcoin ETFs. Although institutional demand is lower, it has shown constant growth in recent months, up 7.9% since the first quarter.

The number of institutional investors has also increased, currently exceeding 1,200. Major institutional holders include investment advisers and hedge funds, as well as major banks and pension funds such as Goldman Sachs, Morgan Stanley and the Wisconsin State 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 because bitcoin’s correlation with the S&P 500 has continued to rise since early 2024, highlighting a shift 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 seen over $103.1 million in outflows, with negative flows in 8 of the 11 weeks since launch.

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