The history of financial markets is punctuated by ruptures, those moments when an asset or an innovation shakes up the established rules. 2024 will go down as the year when bitcoin definitively reached a milestone with the rise of spot ETFs. Long awaited, these financial products have attracted record inflows, with $129 billion in assets under management in less than a year. From their launch, they caused unprecedented enthusiasm, which allowed institutional investors to access bitcoin in a regulated and secure framework. But the impact goes beyond the numbers. Bitcoin is no longer just a speculative asset. It now rivals gold as a store of value. In November, BlackRock's Bitcoin ETF surpassed its gold-backed equivalent, a powerful symbol of changing investor perceptions. As the outlook for 2025 takes shape, one question dominates: can this dynamic be maintained? Between market consolidation, possible expansion to other cryptos like Solana and XRP, and the potential entry of new players like Vanguard, this year 2025 could well redefine the balance of power in the financial markets.
Spot Bitcoin ETFs: an immediate and massive success
The approval of Bitcoin spot ETFs by the Securities and Exchange Commission (SEC) in January 2024 was a historic shift for the crypto market. For more than a decade, requests for spot ETFs had been systematically rejected, as American regulations deemed bitcoin too volatile and subject to manipulation. This time, after a legal battle waged by Grayscale and other asset managers, the decision was finally ratified. Thus, it opened the door to a massive influx of institutional investments.
On its first day of trading, Bitcoin ETFs saw exceptional performance, with a cumulative trading volume of $2.2 billion, an all-time record for an ETF launch in the United States. Among them, BlackRock's iShares Bitcoin Trust (IBIT) emerged as the undisputed leader, attracting $1 billion in just a few hours. This dynamic continued throughout the year, with net flows exceeding $129 billion at the end of the year. Éric Balchunas, ETF analyst at Bloomberg, underlines the extent of the phenomenon in a publication on January 2, 2025 on the social network IBIT finished the year among the top three performing ETFs in terms of inflows, ahead of legacy funds like the Vanguard Total Stock Market ETF (VTI).”
The appeal of these new products is largely explained by a paradigm shift among institutional investors. For years, large financial firms have been hesitant to gain direct exposure to bitcoin, hampered by the volatility of the asset, the absence of a clear regulatory framework and the constraints linked to the custody of cryptos. With spot ETFs, these barriers have disappeared. These products now allow pension funds, asset managers and hedge funds to invest in bitcoin via a regulated, liquid and transparent framework, without having to manage the holding of the tokens themselves. Such a change has accelerated institutional adoption. This adoption has propelled bitcoin to a new financial dimension.
Bitcoin Overtakes Gold, Paves Way for New Crypto ETFs
The rise of spot Bitcoin ETFs has not been 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 in assets under management, surpassing the iShares Gold Trust (IAU), which peaked at $32 billion. This reversal illustrates the evolution of the perception of bitcoin, long considered a speculative asset. Now it rivals gold as the store of value of the 21stth century, and attracts institutional capital seeking protection against inflation and economic instability.
This shift did not happen in one day. Since the arrival of the first spot Bitcoin ETFs, institutional investors have gradually integrated the asset into their portfolios, which has strengthened its legitimacy. At the same time, outflows from gold ETFs have accelerated. Thus some managers preferred to reallocate part of their positions towards bitcoin, considered more efficient in periods of macroeconomic tension. This dynamic was confirmed with the rise in bitcoin prices, which thus consolidated 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 the pipeline for 2025. Thus, the financial community anticipates the approval of several funds dedicated to other cryptos, including Solana and XRP. According to Polymarket, the probability of seeing a Solana ETF approved in 2025 stands at 74%, while that of an XRP ETF reaches 70%. These figures reflect growing investor interest in diversifying beyond bitcoin, particularly towards blockchains that offer specific use cases such as smart contracts and decentralized finance.
At the same time, a strategic change could further amplify this institutional adoption. Vanguard, an asset management giant with $9 trillion under management, has so far been reluctant to integrate bitcoin into its offerings. However, the recent appointment of Salim Ramji, former head of BlackRock, at the head of the company could modify this position. His predecessor, Tim Buckley, displayed marked hostility towards bitcoin, and slowed down any initiative in this area. A turnaround by Vanguard would represent a major step forward for the integration of cryptos into traditional investment portfolios, opening the door to even greater inflows in 2025.
The rise of spot Bitcoin ETFs in 2024 has not only confirmed investor interest in the asset. It demonstrated that a regulated and structured framework could attract institutional capital on a large scale. This solidified bitcoin as a financial asset in its own right. The year 2025 could continue this trend, with new ETFs, increased adoption by financial giants and expansion to other major cryptos. It remains to be seen whether the American regulator will maintain its openness and whether investors will continue to see bitcoin as a credible alternative to traditional assets.
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