Airdrop Army

Demand for Bitcoin and Ethereum ETFs is on fire, leaving most other funds looking weak in comparison. BlackRock’s iShares Bitcoin Trust, launched just this year, has already raked in more cash than any of the other 1,800 ETFs that launched over the last four years. These ETF offerings are now ranking in the top 30 products of 2024, with Bitcoin funds locked into the top four spots. And, let’s just say, the inflow rate is turning heads across Wall Street.

Ever since the Securities and Exchange Commission (SEC) gave Bitcoin ETFs a green light back in January, crypto bulls have had an easy way into the digital asset markets through traditional exchanges. No more wallets or exchanges to fumble with; ETFs let people buy and sell shares that mirror Bitcoin’s price, sidestepping the usual crypto frictions. So, it’s no shocker that these funds crossed the $20 billion mark in just 10 months—a feat that took gold ETFs five years to achieve.

The Pent-Up Demand and Fresh Interest Fueling the ETF Boom

Bloomberg Intelligence’s James Seyffart sees two streams feeding the Bitcoin ETF mania: long-awaited demand from investors who held back until now and fresh faces curious about what all the fuss is about. Seyffart told Decrypt that many investors had an appetite for Bitcoin but held off without a secure and simple route. “I think it was partly pent-up demand,” he said, but it’s also “new demand as people are learning more.”

Traditional finance players are making moves, too. Hedge funds have been doubling down, holding ETF shares long while selling off the corresponding futures contracts. Morgan Stanley and Goldman Sachs aren’t missing out, either. With heavy-hitters betting on Bitcoin through these ETFs, Bitcoin’s price surged to a new high in March after the initial product approvals.

Ethereum ETFs Lagging Behind Bitcoin Giants

Ethereum ETFs have had a bumpier ride. The SEC reluctantly approved these products for America’s second-biggest crypto back in May, but investors haven’t flocked to them with the same energy. Ethereum ETFs launched in July, but inflows haven’t reached anywhere near Bitcoin’s numbers. For now, Bitcoin ETFs appear to have cornered the crypto ETF craze, while Ethereum waits on the sidelines, catching its breath.