The approval of spot Bitcoin ETFs in January 2024 has driven remarkable growth in just nine months. These funds have raised capital at a faster pace than many traditional ETFs, with projections suggesting that their size could double by 2025 and quadruple by 2027. Here’s a look at what’s happening in this rapidly expanding sector.
Fidelity ETF Approaches Key Milestone
While BlackRock’s IBIT fund remains the leader with a whopping $21.7 billion in assets under management, Fidelity’s Wise Origin Bitcoin ETF has also been making waves. Strong net inflows have brought the fund’s total size close to $10 billion. On Friday, the fund’s performance outpaced ARK 21Shares Bitcoin ETF, which saw net inflows of 145 million AUD, while Fidelity registered $20 million more in entries.
IBIT’s Weekly Performance Shines
Although IBIT did not record any net inflows on Friday, its weekly performance was still impressive. On Monday alone, total inflows across all funds reached 349.4 million AUD, though there was a net outflow of 208.4 million AUD from Tuesday to Thursday.
With spot Bitcoin ETFs rapidly gaining traction, forecasts suggest their combined assets could double in the next year. By 2027, the total growth is expected to reach four times its current size.
SEC Scrutinizes Other Crypto ETF Applications
While the fate of ETF applications for other crypto assets such as XRP and Solana remains unclear, the SEC continues to evaluate them. According to analysts from Kaiko, the legal battle between Ripple and the SEC casts doubt on the approval of an XRP ETF. SEC Commissioner Uyeda also voiced concerns about the regulator’s approach, saying it could hurt the industry.
Meanwhile, Matthew Sigel from VanEck argues that Solana should be treated as a commodity, similar to Bitcoin and Ethereum. Sigel believes the outcome of Solana’s ETF application could depend on the results of the upcoming U.S. presidential elections.
Uncertainty in the Regulatory Landscape
While ETF applications for cryptocurrencies outside of Bitcoin and Ethereum remain uncertain, even these two coins faced challenges in securing approval in the past. The current regulatory developments continue to shape market expectations.
As spot Bitcoin ETFs expand, major players like Fidelity and BlackRock maintain their leadership positions. However, the future of the sector will largely depend on the evolving regulatory framework and the SEC’s approach to new applications.
