Spot Bitcoin ETFs' Groundbreaking First Year: A Look Back

Time flies when you’re breaking ETF records. Believe it or not, it’s been one whole year since the Securities and Exchange Commission made its monumental decision to approve spot bitcoin exchange-traded funds for listing in the U.S.

On Jan. 11, 2024, funds including the iShares Bitcoin Trust ETF (IBIT) and the Fidelity Wise Origin Bitcoin Fund (FBTC) began trading, opening the door to a brand new asset class for U.S. ETF investors.

The decision marked the end of a rocky, decade-long journey in which ETF issuers attempted to bring spot bitcoin ETFs to market but were blocked at every turn by the SEC—and ultimately kicked off a period of rapid ETF inflows and price appreciation. 

A Rocky Journey for Bitcoin ETFs 

The journey to the first spot bitcoin ETFs began with the attempted launch of the Winklevoss Bitcoin Trust in 2013, when bitcoin was trading at a mere $90. 

The remarkably early bitcoin ETF attempt never got off the ground, nor did dozens of other proposed bitcoin exchange-traded funds in the years that followed. 

Pointing to concerns about market manipulation and potential harm to retail investors, the SEC steadfastly resisted approving bitcoin ETFs for the longest time.

“Rules and surveillance to prevent manipulative techniques do not exist on all of the exchange venues where digital currencies trade,” former SEC Chairman Jay Clayton, who headed the regulator between 2017 and 2020, explained in 2018. 

However, a breakthrough occurred a couple of years later when Gary Gensler replaced Clayton as head of the SEC.

Bitcoin Futures ETFs Get Approved 

Shortly after assuming his post in August 2021, Gensler expressed an openness to considering bitcoin ETFs. And by October of that same year, bitcoin futures ETFs officially began trading in the U.S.

The bitcoin ETF era had arrived, but it wasn’t everything that investors hoped for. The holy grail for ETF issuers and investors had always been spot bitcoin ETFs, funds that would hold bitcoin more directly.

Through a custodian, the ETFs would control the private keys that are associated with actual bitcoin on the blockchain. Under this arrangement, the bitcoin could be held indefinitely, and there would be no need to roll positions forward over time. 

To many investors, a spot bitcoin ETF would represent more direct exposure to bitcoin than an ETF that holds bitcoin futures. But despite being open to bitcoin futures ETFs, Gensler continued to resist spot bitcoin ETFs. 

In June 2022, the SEC rejected Grayscale’s bid to convert the quasi-closed-end fund, the Grayscale Bitcoin Trust (GBTC), into an ETF. That same week, the company turned around and sued the regulator.

Grayscale, of course, ended up winning that lawsuit, and the rest is history.

Spot Bitcoin ETF Launch, Massive Growth 

By the time spot bitcoin ETFs launched in the U.S., some wondered whether it was too little, too late.

On Jan. 11, 2024, the day that 11 spot bitcoin ETFs began trading in the U.S., the price of bitcoin was around $46,000, almost three times its price of one year prior and 500 times the price of bitcoin when the Winklevoss ETF filing was made. 

Were spot bitcoin ETF buyers getting in at the top? The answer to that question, it turns out, was a resounding no.

Since the day of the launch, bitcoin more than doubled, reaching a high of $108,000 in December and last trading at around $94,000.

Part of that surge over the past year can be explained, at least in part, on the massive demand for spot bitcoin ETFs.

Since their debut, investors have collectively put more than $37 billion into spot bitcoin ETFs. Combined with the surge in bitcoin prices, that’s lifted total assets under management (AUM) in the segment to $107 billion.

The IBIT fund alone has attracted $38 billion in inflows, pushing its AUM up to $52.5 billion.

The ETF grew into a $50 billion fund faster than any ETF in history, and it also holds the record for fastest ETF to $10 billion in AUM.

The one record it missed was the time to get to $1 billion in AUM. At four days, it lagged the two days it took the first bitcoin futures ETF, the BITO, to reach that milestone. 

Of course, IBIT was competing with 10 other spot bitcoin ETFs that launched simultaneously. BITO, on the other hand, had the luxury of being the only ETF of its kind when it began trading.

GBTC Outflows 

What makes the rapid growth of spot bitcoin ETFs especially impressive is that they took place despite record-breaking outflows from one of their own.

The GBTC fund was one of the original spot bitcoin ETFs to launch a year ago, but unlike the brand new products that it competes with, it became an exchange-traded fund through a conversion.

On Jan. 11, it already had $28.5 billion in AUM accumulated over more than ten years.

But rather than flock to what was at the time the largest bitcoin ETF, investors shunned it in favor of cheaper alternatives. At 1.5%, GBTC’s expense ratio was seven times that of IBIT, which incentivized GBTC holders to swap into the cheaper ETF. 

Many investors had also bought GBTC at a discount to its net asset value in anticipation of its conversion into an exchange-traded fund. These arbitrageurs then cashed out when the switch was made.

For 78 straight days after its ETF conversion, GBTC recorded outflows. By the time of its first daily inflow in May, investors had taken $17.5 billion out of the fund. Over the past year, outflows for the ETF totaled $21.5 billion.

New Spot Bitcoin ETF Milestones in Store?

Still, despite the monster outflows from GBTC, spot bitcoin ETFs as a whole registered inflows of $37.1 billion since their debut a year ago—far more than most had predicted.

At $107 billion, total assets under management in U.S.-listed spot bitcoin ETFs represent nearly 6% of bitcoin’s market cap, a figure that will likely increase if spot bitcoin ETFs remain in high demand.

For now, that looks to be the case. In just the one week since the start of 2025, investors have already poured another $1.7 billion into spot bitcoin ETFs.

Perhaps IBIT and its counterparts will reach new milestones this year. The fastest ETF to $100 billion is a record that seems achievable, while the ETF also has a good shot at topping the AUM in the world's largest gold ETF, the $75 billion SPDR Gold Trust (GLD).