Originally published on: September 27, 2024
The total assets in US exchange-traded funds (ETFs) surged past $10 trillion recently, with a significant boost from over $20 billion flowing into crypto ETFs in 2024. This milestone comes as investors worldwide continue to explore the potential of cryptocurrency investments, according to data from leading sources like Bloomberg Intelligence and Morningstar.
In the ever-evolving world of investments, approximately $691 billion has been invested into US ETFs this year alone. Surprisingly, cryptocurrency ETFs have contributed nearly 3% of these massive inflows, signaling a growing interest in the digital asset market.
Eric Balchunas, Bloomberg’s senior ETF analyst, believes that this growth trend will only continue, predicting that ETF assets will soar to $25 trillion within the next decade. He notes how the pace of growth has been remarkable, with assets doubling in just 3.7 years compared to the usual five-year period.
Despite the notable growth, the Grayscale Bitcoin Trust ETF saw some outflows, with almost $20 billion exiting the fund. The fund’s high management fees of 1.5% have been a topic of concern compared to lower-cost competitors.
While spot crypto funds continue to gain traction, ETFs offering leveraged exposure to various assets have dominated new ETF launches in 2024, accounting for about 80% of new issues. Retail investors have also been showing interest in leveraged MicroStrategy ETFs, which have surpassed $400 million in net assets this week.
Interestingly, Vanguard, a major asset manager, has steered clear of launching crypto ETFs but has still attracted around a third of net inflows this year. Meanwhile, the approval of options on spot BTC ETFs by the US Securities and Exchange Commission is expected to open up new opportunities for institutional investors and bring new dynamics to the market.
The recent green light for Nasdaq to list options on BlackRock’s iShares Bitcoin Trust ETF indicates a growing acceptance of cryptocurrencies within the traditional financial system. This development could pave the way for enhanced institutional adoption and potentially unlock significant upside for spot BTC holders in the near future.
