Spot Bitcoin exchange-traded funds (ETFs) have exceeded expectations, with their collective assets under management (AUM) reaching $59.1 billion in the first quarter of the year, according to a research report released on April 11.
JP Morgan and Bitcoin investment management firm NYDIG had predicted that spot Bitcoin ETFs could reach an AUM of $36 billion and $30 billion by the end of the year. Meanwhile, Matrixport forecasted that the ETF would gather an AUM between $24 billion and $50 billion by December 31, 2024.
The actual AUM has surpassed earlier predictions, nearly doubling the estimates made by the companies. Spot Bitcoin ETFs are now on track to meet the more optimistic forecasts put forth by CryptoQuant, Standard Chartered, and Bloomberg Intelligence.
Bloomberg and Standard Chartered anticipate that the ETFs could reach an AUM of around $100 billion by the end of the year, while CryptoQuant believes they could hit $150 billion.
The data includes Grayscale’s GBTC, which makes up $22.26 billion of the total AUM and has experienced mostly outflows since its inception.
In addition, Bitwise’s report revealed that demand for spot Bitcoin ETFs outpaced new BTC production in the first quarter of 2024. Miners produced 74,756 BTC during this period, while the ETFs collectively received 212,852 BTC—2.8 times more than the amount produced.
The report also pointed out that the upcoming halving event for Bitcoin, expected around April 20, could impact the supply-demand balance.
Despite the success of Bitcoin ETFs, they only represent a small fraction of Bitcoin ownership, holding 800,000 BTC, which is equivalent to 3.9% of all Bitcoin ownership. The majority of Bitcoin is held by individuals (57%), inactive accounts (17.6%), and other smaller categories.
The report also highlighted Bitcoin’s strong performance year-to-date, with a 66.99% increase in value, outperforming most other markets, including US equities (10.56%), gold (8.09%), and DM equities (5.81%).
Bitwise CIO Matt Hougan emphasized the low correlation between Bitcoin and the S&P 500, signaling that Bitcoin may serve as a hedge against traditional markets.
Hougan suggested that the report should instill a “staggeringly bullish” sentiment towards the crypto market, noting that crypto has been in a bull market phase for the past 1.25 years, with bull markets typically lasting three years. This suggests that the strong performance seen in the crypto market may continue.
