The launch of bitcoin ETFs in January 2024 was heralded as a groundbreaking moment for the market. Many hoped that these products would open the floodgates to institutional capital and catapult bitcoin prices to new heights. But now, a year later, have bitcoin ETFs delivered on their promise?
For a more in-depth look at this topic, watch a recent YouTube video here: Have bitcoin ETFs Lived Up to Expectations?
A good start
Since its launch, <a target="_blank" href="https://www.bitcoinmagazinepro.com/bitcoin-portfolio/bitcoin-etf-cumulative-flows-btc/”>bitcoin ETFs Have Accumulated Over 1 Million btcequivalent to approximately $40 billion in assets under management. Even taking into account outflows from competing products such as Grayscale bitcoin Trust (GBTC), which recorded withdrawals of over 400,000 btc, the net inflows are still significant, around 540,000 btc.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyNzg4OTcwODY2MjEx/bitcoin-etf-cumulative-flows.jpg”>
<a target="_blank" href="https://www.bitcoinmagazinepro.com/bitcoin-portfolio/bitcoin-etf-cumulative-flows-btc/”>View live chart
To put this in perspective, the scale of inflows far exceeds what we witnessed during the launch of the first gold ETFs in 2004. Gold ETFs raised $3.45 billion in their first year, a fraction of the $37.5 billion dollars of bitcoin ETF inflows over the same period. . This highlights the intense institutional interest in bitcoin as a financial asset.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyNzk1OTUwMTg4NTIw/gold-etf-vs-bitcoin-etf.jpg”>
bitcoin's year of growth
Following the launch of bitcoin ETFs, initial price movements were disappointing, with bitcoin briefly falling by almost 20% in a “buy the rumor, sell the news” scenario. However, this bearish trend was quickly reversed. Over the past year, bitcoin prices have increased by approximately 120%, reaching new highs. For comparison, the first year after the launch of gold ETFs saw a modest gold price increase of 9%.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyODA1MzQ1NDI5MDI3/bitcoin-gains-since-etf-launch.jpg”>
Following the Golden Fractal
When taking into account bitcoin's 24/7 trading hours, which results in approximately 5.3 times more annual trading hours than gold, a striking similarity emerges. By overlaying the first year of bitcoin ETF price action with historical gold data (adjusted for trading hours), we can see almost the same percentage return. If bitcoin continues to follow the gold pattern, we could see a further 83% price increase by mid-2025, which could take the price of bitcoin to around $188,000.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyODEyNTkzMTg2Nzky/bitcoin-etf-vs-gold-etf-performance.jpg”>
Institutional Strategy
An intriguing insight from bitcoin ETFs has been the relationship between <a target="_blank" href="https://www.bitcoinmagazinepro.com/bitcoin-portfolio/bitcoin-etf-daily-flows-usd/”>Fund inflows and price movements. A simple strategy of buying bitcoin on days with positive ETF inflows and selling on days with outflows has consistently outperformed a traditional buy-and-hold approach. From January 2024 to today, this strategy has returned 130%, compared to ~100% for a buy-and-hold investor, an outperformance of almost 10%.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyODE5MzA0MDczMTky/bitcoin-etf-daily-flows-total-usd.jpg”>
<a target="_blank" href="https://www.bitcoinmagazinepro.com/bitcoin-portfolio/bitcoin-etf-daily-flows-usd/”>View live chart
To learn more about this institutional entry strategy, watch the following video:
Using ETF Data to Outperform bitcoin (Must Watch)
Supply and demand dynamics
While bitcoin ETFs have accumulated over 1 million btc, this represents only a small fraction of bitcoin's total circulating supply of 19.8 million btc. <a target="_blank" href="https://www.bitcoinmagazinepro.com/charts/bitcoin-treasury-treemaps/”>Corporations like MicroStrategy They have also contributed to institutional adoption, collectively holding hundreds of thousands of btc. However, the majority of bitcoin remains in the hands of individual investors, ensuring that market dynamics continue to be driven by decentralized supply and demand.
<img src="https://bitcoinmagazine.com/.image/c_fit%2Ch_800%2Cw_1200/MjEyMDAyODI2MjgzMzk1MDQ4/bitcoin-treasury-treemaps.jpg”>
<a target="_blank" href="https://www.bitcoinmagazinepro.com/charts/bitcoin-treasury-treemaps/”>View live chart
Conclusion
One year later, bitcoin ETFs have exceeded expectations. With billions in inflows, a significant impact on price appreciation, and growing institutional adoption, they have solidified their role as a key driver of the bitcoin market narrative. While some early skeptics were disappointed by the lack of immediate explosive price action, the long-term outlook remains very bullish.
Comparisons to gold ETFs provide a compelling roadmap for bitcoin's future. If the gold fractal holds, we could be on the cusp of another big rally. Coupled with favorable macroeconomic conditions and growing institutional interest, bitcoin's future appears brighter than ever.
Explore live data, charts, indicators and in-depth research to stay ahead of the bitcoin price action in bitcoin Pro Magazine.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
