Bitcoin ETF Dominates Global ETF Market With $17.5B Influx, Bitwise CIO Says

Bitcoin ETFs are emerging as the fastest-growing ETFs, attracting significant attention from institutional investors.

Since launching in January 2024, these ETFs have pulled in a remarkable $17.5 billion in net flows, outpacing the previous record held by the Nasdaq-100 QQQs, which gathered approximately $5 billion in their first year.

Bitcoin ETF Dominates Global ETF Market With $17.5B Influx

Bitcoin ETFs have seen a record-setting pace in adoption, especially among institutional investors. Matt Hougan, CIO of Bitwise, highlighted in a recent X thread that they have drawn the fastest-growing inflows of all time. The $17.5 billion influx since their launch marks a significant milestone, surpassing the previous record held by the Nasdaq-100 QQQs by a wide margin.

This rapid growth is particularly noteworthy given the ongoing skepticism from some market participants who claim that institutional adoption is minimal.

1/ Bitcoin ETFs are being adopted by institutional investors faster than any other ETF in history. Don't believe the "it's just retail" story. The data prove otherwise.

A thread.

— Matt Hougan (@Matt_Hougan) August 21, 2024

One of the main arguments against the success of these ETFs has been the perception that they are primarily driven by retail investors, with minimal institutional participation. Critics point to 13F filings, which show that as of Q2 2024, institutions hold only 21% of the current BTC ETF assets under management (AUM), while retail investors account for the remaining 79%.

However, Hougan’s analysis challenges this narrative by comparing them to the 10 fastest-growing new ETFs in history. His findings reveal that the former are leading in institutional adoption, whether measured by the number of institutions or the total AUM.

Nasdaq-100 QQQs Institutional Adoption

Hougan also compared the institutional adoption of BTC ETFs to that of the Nasdaq-100 QQQs, the previous record-holder for ETF inflows. While direct comparisons are challenging due to differences in the time periods and availability of historical data, Hougan notes Bitcoin ETFs have attracted three times the number of institutional holders within the first two quarters compared to the QQQs during a similar timeframe.

This suggests that institutional interest in them is not only present but is also growing at an unprecedented rate.

Global ETF flows are at $911b YTD, a near lock to break their ann record of $1.2T thanks to more contrib from non-US countries who are adding close to 40% of total vs 25% in 2021. Also, there's been 1,121 ETFs launched globally this year, which is also record pace. pic.twitter.com/3BIVaHd1Kx

— Eric Balchunas (@EricBalchunas) August 21, 2024

Concurrently, the growth of BTC ETFs is part of a broader trend in the global ETF market, which has seen record-breaking inflows in 2024. Eric Balchunas, a Bloomberg ETF analyst, pointed out that global ETF flows have reached $911 billion year-to-date, with these ETFs being a significant contributor to this surge. 

Notably, BlackRock’s IBIT secured the third spot among global issuers in terms of year-to-date influx.

Bitcoin Price Outlook

Subsequently, the rise of Bitcoin ETFs has also coincided with broader trends in the cryptocurrency market. Analysts have noted a potential “short squeeze” in Bitcoin derivatives, which could lead to a sharp rally in BTC prices. 

The recovery in the Fear and Greed Index and continued inflows into these ETFs suggest a positive market sentiment, despite ongoing macroeconomic and political uncertainties in the United States.

Meanwhile, at press time, Bitcoin price had recovered and was trading at $60,012, a 1.80% surge from the intra-day low.