Bloomberg ETF analyst Eric Balchunas recently shared a list of the top-performing exchange-traded funds (ETFs) over the past decade. Interestingly, two spot Bitcoin ETFs managed to make it into the top ten, which is quite an achievement given how new they are. BlackRock’s IBIT ranked fourth, and Fidelity’s FBTC came in at ninth place on this list. Most other funds in the top ten have been around since 2020, giving them much more time to grow, but these two Bitcoin ETFs only launched in January, less than ten months ago.
Balchunas emphasized how impressive it is that both BlackRock and Fidelity’s Bitcoin ETFs have achieved so much in such a short time. He mentioned that there have been about 2,000 ETFs launched in this decade alone, but only 10 of them have over $10 billion in assets under management (AUM). He also pointed out that half of the list is made up of well-established funds from companies like JP Morgan, Dimensional Fund Advisors, and Capital Group. For Bitcoin ETFs to compete with these legacy funds is a stunning accomplishment.
The assets under management (AUM) for BlackRock’s IBIT ETF reached a massive $21.52 billion, while Fidelity’s FBTC stands at $9.87 billion. These numbers show just how much interest there is in crypto ETFs. This success has positioned both BlackRock and Fidelity as leaders in the Bitcoin ETF market. The significant inflows of money into these funds also show how crypto-related ETFs have grown and what could be in store for the future of this market.
One of the reasons for the rapid rise of BlackRock’s and Fidelity’s Bitcoin ETFs is the overall growth of crypto ETFs. Since their launch on January 11, Bitcoin ETFs have collectively brought in over $45 billion, making them the fastest-growing ETFs in history. The demand for exposure to Bitcoin through these financial products has been unprecedented. Both institutional and retail investors are looking for safe and regulated ways to invest in cryptocurrency, and these ETFs provide that.
The $45 billion in inflows for Bitcoin ETFs is even more impressive when you consider that October has been a mixed month for these funds. In the first few days of the month, BlackRock’s IBIT ETF saw inflows of $40.8 million, but then outflows of $13.7 million shortly after. Fidelity’s FBTC ETF experienced a similar pattern, with an outflow of $144.7 million followed by an inflow of $21.1 million. These movements suggest that while investors are still interested in Bitcoin ETFs, they are being cautious due to the broader market conditions.
Other Bitcoin ETFs, such as Bitwise’s BITB, Invesco’s BTCO, Franklin Templeton’s EZBC, and VanEck’s HODL, saw little to no inflows during the same period. Some even experienced small outflows, showing that not all Bitcoin ETFs are performing at the same level as BlackRock’s and Fidelity’s. Grayscale’s GBTC and Mini BTC ETFs, as well as Wisdom Tree’s BTCW and Valkyrie’s BRRR, also had minimal activity, highlighting the competitive nature of the crypto ETF market.
One ETF that stands out for a different reason is Ark’s ARKB, which has recorded three straight days of outflows. Over two consecutive days in October, ARKB lost $84.3 million and $60.3 million, adding to its previous losses. Despite these negative flows, many analysts believe that Bitcoin ETFs, in general, are well-positioned to see further inflows as the month progresses.
BlackRock recently received approval to offer options trading for its IBIT ETF, which could boost its appeal even more. Many investors use options trading as a way to hedge their positions or make more speculative bets on the future price of an asset. Now that BlackRock has this approval, it is expected that other Bitcoin ETFs, such as Fidelity’s FBTC, will follow suit. This new feature could attract even more institutional investors who want greater flexibility in how they trade Bitcoin ETFs.
While the potential for growth remains strong, Bitcoin’s recent performance has been somewhat lackluster. Since the start of October, Bitcoin’s price has dropped by 6%, falling from over $64,000 to around $60,773. According to data from CoinMarketCap, it has declined 1% in the last 24 hours alone. The price drop is partly due to ongoing conflicts in the Middle East, which have created uncertainty in global markets. Investors are pulling out of riskier assets like cryptocurrencies, leading to a short-term decline in Bitcoin’s value.
The geopolitical situation has raised concerns about Bitcoin’s maturity as an asset. Some investors are questioning whether Bitcoin can serve as a reliable store of value during times of crisis, especially when compared to more traditional safe-haven assets like gold. While Bitcoin has often been called “digital gold,” its recent performance suggests that it may not yet be ready to take on that role fully.
However, despite the recent price dip, many investors remain bullish on Bitcoin’s long-term prospects. Historically, October has been one of the best months for Bitcoin, with the cryptocurrency showing gains in nearly every October since 2013. Only three times in the past decade has Bitcoin posted negative returns for the month. Given this trend, some experts believe that the current downturn is only temporary and that Bitcoin could recover before the month ends.
The future of Bitcoin ETFs looks bright, especially as more institutional investors get involved. The introduction of options trading for BlackRock’s IBIT ETF is likely to bring in even more investors who are looking for new ways to gain exposure to Bitcoin. Additionally, as more countries and financial institutions embrace cryptocurrency, the demand for regulated products like Bitcoin ETFs is expected to grow.
While geopolitical tensions may continue to affect Bitcoin’s short-term performance, the overall outlook for Bitcoin ETFs remains positive. Investors are increasingly viewing Bitcoin ETFs as a convenient and secure way to invest in cryptocurrency without having to deal with the complexities of owning and storing Bitcoin directly. As a result, these ETFs are likely to continue attracting significant inflows, especially as the market matures.
The performance of BlackRock’s IBIT and Fidelity’s FBTC spot Bitcoin ETFs in 2024 has been nothing short of remarkable. Despite their relatively recent launch, both ETFs have climbed to the top of the list of the largest ETFs by asset value. This shows that there is strong demand for Bitcoin exposure, even in the face of market volatility and geopolitical risks. As options trading becomes available for more Bitcoin ETFs, the market will likely see even more growth in the coming months.
Bitcoin may have experienced a dip in price at the start of October, but its long-term potential remains strong. As investors look for new ways to diversify their portfolios and gain exposure to digital assets, Bitcoin ETFs are positioned to play a major role in the future of the financial industry.
