KoinlyticsOn January 10, 2024 the SEC approved 11 spot Bitcoin ETFs after a decade of rejections. Trading started January 11. Within their first year they became one of the fastest-growing ETF launches in history.
The approved 11
- iShares Bitcoin Trust (IBIT) — BlackRock. Now largest by AUM.
- Fidelity Wise Origin Bitcoin Fund (FBTC).
- ARK 21Shares Bitcoin ETF (ARKB).
- Bitwise Bitcoin ETF (BITB).
- Grayscale Bitcoin Trust (GBTC) — converted from trust.
- Franklin Bitcoin ETF (EZBC), Invesco Galaxy (BTCO), Valkyrie (BRRR), VanEck (HODL), WisdomTree (BTCW), Hashdex (DEFI).
Fee war
Fees compressed from Grayscale's 1.5% to BlackRock/Fidelity's 0.25% (with initial fee waivers under 0.20% for the first year). Grayscale continues to lose share to lower-cost competitors.
AUM growth
Combined AUM crossed $50B within months. IBIT alone hit $20B faster than any ETF in history.
Where the BTC comes from
ETFs must hold real Bitcoin. Coinbase Custody holds ~90% of ETF Bitcoin. Every dollar of ETF inflow removes Bitcoin from circulating supply available for spot buyers.
Impact on price and supply
- Cumulative ETF net inflows have absorbed hundreds of thousands of BTC.
- This is a structural demand source that did not exist pre-2024.
- Combined with halving supply cut, net Bitcoin available to market shrank meaningfully.
What ETFs don't give you
- Ownership of Bitcoin (you own a share of a trust that owns Bitcoin).
- Self-custody.
- Ability to use Bitcoin for payments or DeFi.
- Protection against SEC changing rules.
ETH ETFs followed
Spot Ethereum ETFs approved July 2024. Staking not allowed (yet). AUM growing but slower than BTC ETFs.