Spot Bitcoin ETFs are “quietly on fire” according to experts

U.S. spot Bitcoin exchange-traded funds (ETFs) have started the year on an exceptionally strong note, according to Eric Balchunas, a senior ETF analyst at Bloomberg. The launch of spot Bitcoin ETFs in the U.S. has now been just over a year, and they have made a significant impact, achieving record net inflows and substantial growth in assets under management (AUM) throughout 2024. These funds have entered 2025 with continued momentum, highlighting the growing interest in Bitcoin as an investment vehicle.

Balchunas shared his observations on X (formerly Twitter) on January 24, pointing to the impressive performance of several U.S. spot Bitcoin ETFs, including BlackRock’s IBIT, Fidelity’s FBTC, and Ark/21Shares’ ARKB. These funds have seen significant inflows year to date, with IBIT recording net inflows of over $2.3 billion and FBTC attracting more than $1.1 billion. According to Balchunas, the spot Bitcoin ETFs have been experiencing impressive flows, totaling $4.2 billion in the first few weeks of 2025, which represents 6% of all ETF flows.

The success of spot Bitcoin ETFs is undeniable, with over $40 billion in net inflows since their launch, leading to a total AUM of more than $121 billion. With a return of around 127%, spot Bitcoin ETFs have surpassed other investment categories, including environmental, social, and governance (ESG) ETFs in total assets. Leading ESG ETFs, such as Vanguard ESG U.S. Stock ETF, iShares Global Clean Energy ETF, and SPDR S&P 500 Fossil Fuel Reserves Free ETF, collectively hold around $117 billion in AUM.

Balchunas also pointed out that the net assets held in spot Bitcoin ETFs are now comparable to those of gold spot. This suggests that Bitcoin, through these ETFs, is continuing to gain legitimacy as an asset class and is being embraced by investors looking for alternatives to traditional investments.

While the Bitcoin ETF market has seen significant success, the Ethereum (ETH) market has not experienced the same level of traction. Meanwhile, the overall crypto market has witnessed an increasing number of altcoin ETF filings, including those for Solana, XRP, Litecoin, TRUMP, and Dogecoin. However, Balchunas believes that these altcoin ETFs are unlikely to pose a significant threat to the dominance of Bitcoin ETFs. He pointed out that while Ethereum ETFs have seen positive inflows, totaling around $130 million year to date, Bitcoin remains the clear leader in the ETF category, and even if several altcoin ETFs are launched, they will likely “fight over crumbs” in comparison.

Spot Bitcoin ETFs have also experienced consistent positive flows, including $188 million in inflows on January 23, marking the sixth consecutive day of positive flows. 2025 has already seen substantial inflows, with over $1 billion on January 17 and $805 million on January 21. The slight slowdown to $188 million on January 23 came as the market reacted to former President Donald Trump’s crypto executive order. Despite this, the overall trend remains positive, with Bitcoin ETFs continuing to draw attention and investment, reinforcing their growing importance in the financial markets.

In summary, U.S. spot Bitcoin ETFs are experiencing significant success, with strong inflows and expanding assets. Their dominance in the ETF space is set to continue, while Ethereum and altcoin ETFs may struggle to match Bitcoin’s momentum in the near term. As institutional and retail investors continue to embrace Bitcoin as an asset class, the success of spot Bitcoin ETFs reflects broader market interest in digital assets.