Bitcoin ETFs ended last week on another positive note with net inflows of $997.70 million demand has reached its highest level in six months. Without a doubt, these ETFs have marked a turning point for Bitcoin and other cryptocurrencies since the beginning of the year, opening up the cryptocurrency to inflows from all directions.

Interestingly, the data showed that retail investors account for the majority of demand for Spot Bitcoin ETFs, accounting for 80% of total assets under management.

Bitcoin ETFs are changing the narrative

According to Bloomberg dataBitcoin ETFs dominated the ETF landscape in 2024, taking the top four positions by inflows of all ETFs launched this year. Notably, of the 575 ETFs launched so far, 14 of the top 30 are recent funds focused on Bitcoin or Ethereum. The standout performer is the BlackRock IBIT fund, which has attracted over $23 billion in inflows since the beginning of the year.

Last week was another example of positive performance by Spot Bitcoin ETFs, despite the coin consolidating below the $68,000 price level. According to data flow from SosoValue’s weekly inflows began on Monday, October 21 with a positive $294.29 million flowing into the funds and ended the week with inflows of $402.08 million on Friday, October 25.

Interestingly, Spot Bitcoin ETFs currently hold approximately 938,700 BTC within 10 months of launch and are steadily approaching the 1 million BTC mark. While these ETFs have opened the door to institutional investors, recent report from the Binance cryptocurrency exchange indicates that the main factors driving this enhance in demand are individual investors, representing 80% of shares in Spot BTC ETF funds.

Originally intended to provide institutional investors with access to BTC, Spot Bitcoin ETFs have now become the preferred choice for many retail investors looking to take advantage of the regulatory transparency they offer. However, institutional demand remains steady, with institutional shares up 30% since the first quarter.

Among institutional investors, investment advisors turned out to be the fastest growing party, with their shares increasing by 44.2% this quarter, reaching 71,800 BTC.

What’s next for Spot Bitcoin ETFs?

Thanks to the rapid growth of Bitcoin exchange-traded funds, an impressive 1,179 institutions, including financial giants such as Morgan Stanley and Goldman Sachs, have joined the cryptocurrency capitalization table in less than a year. For comparison, gold ETFs in the first year of operation, they managed to attract only 95 institutions.

This is an upward trajectory for institutional investment in Bitcoin is going to continue for the foreseeable future, which bodes well for Bitcoin’s overall price outlook. As these ETFs attract more institutional capital, they are likely to trigger second-order effects such as increased BTC dominance, improved market efficiency, and reduced volatility, which could significantly benefit the cryptocurrency ecosystem.

At the time of writing, Bitcoin is trading at $67,100.

Featured image from Reuters, chart from TradingView