Spot bitcoin ETFs capture 90% of market share, leaving futures ETFs in the dust (2024)

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Quick Take

Spot bitcoin ETFs now hold nearly 90% of the daily trading volume market share, while bitcoin futures ETFs account for around 10%.

Spot bitcoin ETFs capture 90% of market share, leaving futures ETFs in the dust (2)

Just two months after their introduction, U.S. spot bitcoin exchange-traded funds have captured nearly 90% of the daily trading volume market share for ETFs offering price exposure to bitcoin.

Bitcoin futures ETFs, introduced in 2021, now hold a mere 10% share.

That marks an all-time high percentage for the daily volume market share of spot bitcoin ETFs, according to The Block’s Data Dashboard. The numbers highlight investors' strong preference for direct exposure to bitcoin via ETFs over products based on bitcoin futures contracts.

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Indeed, the trading volume for spot bitcoin ETFs has remained robust since their Jan. 11 launch, reaching a total of $113.5 billion to date. BlackRock’s IBIT, Grayscale’s GBTC and Fidelity’s FBTC funds have been the leading contributors to this volume, with IBIT and FBTC also leading in inflows. GBTC, on the other hand, has seen over $11 billion worth of outflows to date, according to BitMEX Research data.

Earlier this year, JPMorgan analysts projected that GBTC could see outflows of up to $13 billion in 2024, largely attributed to its 1.5% fees, which are quite high compared to other spot bitcoin ETFs. They also anticipated a surge in popularity for spot bitcoin ETFs among retail investors, with institutional investors potentially transitioning from futures-based ETFs and GBTC to spot bitcoin ETFs. The current 90% daily volume market share of spot bitcoin ETFs appears to align with the analysts' prediction.

The price of bitcoin has skyrocketed this year, currently trading at around $72,150, according to The Block’s prices page. Bitcoin has been setting new records as more money flows into spot bitcoin ETFs due to the cryptocurrency's price surge, not the other way around, according to FalconX’s head of research, David Lawant. "If until about one week ago spot ETF inflows were driving prices, I have the impression that more recently prices are, at least to some extent, starting to also drive inflows," Lawant said on Friday.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

About Author

Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [emailprotected]. For her latest work, follow her on X @Yogita_Khatri5.

Editor

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FAQs

What is a spot bitcoin ETF? ›

A spot bitcoin ETF is an exchange-traded fund that tracks the spot, or current price of bitcoin. By holding an equivalent amount of bitcoin to back every share of the ETF that is sold, the fund is actually backed by bitcoin itself.

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How successful were the bitcoin ETFs? ›

The Bitcoin ETFs were widely seen as the most successful ETF launch of all time. Both in terms of their combined volumes and flows on the first day, as well as their continued high metrics over the following months.

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What is the difference between spot bitcoin and futures ETF? ›

Spot Bitcoin ETFs vs.

Spot Bitcoin ETFs directly hold Bitcoins, but derivatives-based Bitcoin ETFs use financial instruments like futures contracts to replicate Bitcoin's prices. Spot Bitcoin ETFs thus have direct ownership of Bitcoins.

Why ETFs are bad for bitcoin? ›

‍Extreme Volatility: Bitcoin is notorious for its substantial price fluctuations, making ETFs that track its price inherently high-risk investments. Investors must be prepared for the possibility of significant and rapid losses. ‍Regulatory Uncertainty: This space for cryptocurrencies is constantly evolving.

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What is the best Bitcoin ETF to buy? ›

7 Best Cryptocurrency ETFs to Buy

ETF	Expense ratio
iShares Bitcoin Trust (ticker: IBIT)	0.25%
ProShares Bitcoin Strategy ETF (BITO)	0.95%
Roundhill Bitcoin Covered Call Strategy ETF (YBTC)	0.95%
Global X Blockchain ETF (BKCH)	0.50%

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Jul 8, 2024

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What is the main advantage of investing in bitcoin ETFs? ›

Investing in a Bitcoin ETF provides leverage to the price of Bitcoin without having to learn about how Bitcoin works, having to sign up for a cryptocurrency exchange, and taking on the risks of owning Bitcoin directly.

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Is it better to invest in bitcoin or bitcoin ETF? ›

There are several benefits to owning the actual Bitcoin by purchasing through a cryptocurrency exchange. In some situations, the ETFs offer investors all they need. The decision between the two will come down to personal preference and technological savvy.

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Has anyone gotten rich from ETFs? ›

Billionaires don't just buy individual stocks. ETFs can have excellent wealth-building potential over time, as well. Billionaire investors like Warren Buffett and others are often known for their stock-picking abilities, and for good reason.

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What is the difference between bitcoin trust and bitcoin ETF? ›

Bitcoin Trusts indirectly own Bitcoin through the trust's holdings. Conversely, a Bitcoin ETF (Exchange-Traded Fund) is a fund that tracks the price of Bitcoin and is traded on stock exchanges, just like a stock. ETF investors buy shares of the fund, which in turn owns Bitcoin.

Which is better futures or spot? ›

Spot trading is better for long-term investing because you are buying and holding the actual asset without borrowing funds or using leverage. Futures trading is better for short-term speculation, leverage, hedging, and shorting.

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How do bitcoin futures ETFs work? ›

Here's how it works: An investment company creates a subsidiary that acts as a commodity pool. The pool in turn trades bitcoin futures contracts typically in an effort to mimic the spot price of bitcoin. But there are costs involved like “roll premiums” and management fees, among others.

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Why are futures better than ETFs? ›

A Comparison

Compare futures with ETFs and see why futures are the more compelling instrument. None, there are no annual management fees. ETFs have annual management fees. Futures margin is capital-efficient with performance bond margins usually less than 5% of notional amount.

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Who is the custodian of the bitcoin spot ETF? ›

Eight out of the 10 currently-trading spot Bitcoin ETFs use Coinbase (COIN) as their Bitcoin custodian. The only exceptions are the Fidelity Wise Origin Bitcoin Fund (FBTC), which uses Fidelity itself as a custodian, and the VanEck Bitcoin Trust (HODL), which uses Gemini.

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Why should we avoid ETFs? ›

Market risk

The single biggest risk in ETFs is market risk. Like a mutual fund or a closed-end fund, ETFs are only an investment vehicle—a wrapper for their underlying investment. So if you buy an S&P 500 ETF and the S&P 500 goes down 50%, nothing about how cheap, tax efficient, or transparent an ETF is will help you.

Does BlackRock own actual bitcoin? ›

BlackRock has accumulated nearly 11,500 bitcoin for its newly-listed spot bitcoin exchange-traded fund (ETF) as the Wall Street titan rapidly builds one of the largest troves of BTC in the world.

What is the fidelity spot Bitcoin ETF? ›

Fidelity's spot crypto ETPs provide investors with the opportunity to gain indirect exposure to the performance of bitcoin or ether in their brokerage accounts. FBTC and FETH are exchange-traded products and can be bought through brokerage, trust, and tax-advantaged accounts.

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What is the difference between BTC and BTC ETF? ›

When you purchase ETFs, you don't own the underlying Bitcoin, thus limiting your control over your investment. The Bitcoins held in the ETF are all under custodial ownership, which means if the custodian were to suffer from a security breach or loss of access, it would greatly affect the investors holding the ETFs.

How to buy Bitcoin spot ETF? ›

Spot Bitcoin ETFs are available at many online brokers that offer ETFs, often with no trade commission. One major brokerage, Fidelity, had its own spot Bitcoin ETF, the Fidelity Wise Origin Bitcoin Fund (FBTC), approved.

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What is the difference between Bitcoin trust and Bitcoin ETF? ›

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