Bitcoin ETF Boom : A Historic Shift In Finance

The history of financial markets is marked by disruptions, those moments when an asset or an innovation challenges the established rules. 2024 will be remembered as the year when bitcoin definitively crossed a milestone with the rise of spot ETFs. Long-awaited, these financial products attracted record inflows, with 129 billion dollars in assets under management in less than a year. From their launch, they sparked unprecedented enthusiasm, allowing institutional investors to access bitcoin in a regulated and secure framework. However, the impact goes beyond the numbers. Bitcoin is no longer just a speculative asset. It now competes with gold as a store of value. In November, BlackRock’s Bitcoin ETF surpassed its gold-backed equivalent, a strong symbol of the changing perception among investors. As the prospects for 2025 take shape, one question dominates: can this momentum be maintained? Between market consolidation, a possible expansion towards other cryptos like Solana and XRP, and the potential entry of new players like Vanguard, the year 2025 could well redefine the balance of power in financial markets.

The Spot Bitcoin ETF : An Immediate and Massive Success

The approval of spot Bitcoin ETF by the Securities and Exchange Commission (SEC) in January 2024 marked a historic turning point for the crypto market. For over a decade, applications for spot ETFs were systematically rejected, with U.S. regulators deeming bitcoin too volatile and prone to manipulation. This time, after a legal battle led by Grayscale and other asset managers, the decision has finally been ratified. Thus, it opened the door to a massive influx of institutional investments.

From their first day of trading, Bitcoin ETFs recorded exceptional performances, with a total trading volume of 2.2 billion dollars, an absolute record for an ETF launch in the United States. Among them, BlackRock’s iShares Bitcoin Trust (IBIT) established itself as the undisputed leader, attracting 1 billion dollars in just a few hours. This momentum continued throughout the year, with net flows exceeding 129 billion dollars by the end of the fiscal year. Eric Balchunas, an ETF analyst at Bloomberg, highlights the scale of the phenomenon in a publication on January 2, 2025, on social media platform X (formerly Twitter): “ IBIT finished the year among the top three ETFs in terms of incoming flows, ahead of historic funds like the Vanguard Total Stock Market ETF (VTI).”

The appeal of these new products can largely be explained by a paradigm shift among institutional investors. For years, large financial firms hesitated to expose themselves directly to bitcoin, held back by the asset’s volatility, the absence of a clear regulatory framework, and the challenges associated with crypto custody. With spot ETFs, these barriers have disappeared. These products now allow pension funds, asset managers, and hedge funds to invest in bitcoin through a regulated, liquid, and transparent framework, without having to manage the custody of the tokens themselves. Such a shift has accelerated institutional adoption. This adoption has propelled bitcoin into a new financial dimension.

Bitcoin Surpasses Gold and Paves the Way for New Crypto ETFs

The rise of spot Bitcoin ETFs was not limited to commercial success. It marked a symbolic shift in the hierarchy of investment assets. In November 2024, BlackRock’s iShares Bitcoin Trust (IBIT) reached 33.2 billion dollars in assets under management, thereby surpassing the iShares Gold Trust (IAU), which peaked at 32 billion dollars. This reversal illustrates the evolving perception of bitcoin, long considered a speculative asset. Now, it competes with gold as a store of value for the 21^st century, attracting institutional capital seeking protection against inflation and economic instability.

This shift did not happen overnight. Since the arrival of the first spot Bitcoin ETFs, institutional investors have gradually integrated the asset into their portfolios, reinforcing its legitimacy. At the same time, outflows from gold ETFs accelerated. As a result, some managers preferred to reallocate part of their positions towards bitcoin, seen as more performant during macroeconomic tension. This trend was confirmed with the rise in bitcoin prices, further solidifying its attractiveness compared to traditional assets.

The success of Bitcoin ETFs has paved the way for the expansion of the crypto ETF market, with new products in preparation for 2025. Thus, the financial community anticipates the approval of several funds dedicated to other cryptos, notably Solana and XRP. According to Polymarket, the probability of a Solana ETF being approved in 2025 stands at 74 %, while that of an XRP ETF reaches 70 %. These figures reflect a growing interest among investors for diversification beyond bitcoin, especially towards blockchains that offer specific use cases like smart contracts and decentralized finance.

In parallel, a strategic change could further amplify this institutional adoption. Vanguard, a giant in asset management with 9 trillion dollars under management, has so far been reluctant to incorporate bitcoin into its offerings. However, the recent appointment of Salim Ramji, former BlackRock executive, at the helm of the company could change this position. His predecessor, Tim Buckley, exhibited marked hostility towards bitcoin, hindering any initiative in this area. A turnaround from Vanguard would represent a major advancement for the integration of cryptos into traditional investment portfolios, which would open the door to even larger inflows in 2025.

The rise of spot Bitcoin ETF in 2024 not only confirmed investors’ interest in the asset. It demonstrated that a regulated and structured framework could attract institutional capital on a large scale. This has consolidated bitcoin as a fully-fledged financial asset. The year 2025 could extend this trend, with new ETFs, increased adoption by financial giants, and an expansion towards other major cryptos. It remains to be seen whether the U.S. regulator will maintain its openness and whether investors will continue to see bitcoin as a credible alternative to traditional assets.