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Understanding the Success of the Spot Bitcoin ETFs: What Makes Them Unique?

bitcoin etf

The launch of the spot Bitcoin ETFs has been more successful than almost any dared to imagine. The positive performance of these products, as measured by both inflows and share price, warrants some consideration.

This article will explore the magnitude and speed of Bitcoin ETF success, the regulatory hurdles these funds faced before approval, and take an in-depth look at how some of the most popular securities are structured.

Bitcoin ETFs: The Most Successful ETF Launch in History

Within a single day of being listed, the Bitcoin ETFs saw over $4 billion in inflows, shattering records held by any ETFs that debuted prior. As the weeks and months went on, many of the individual funds continued to break records.

Over the last 30 years, 5,535 ETFs have launched, with all of them seeing less impressive numbers than the ETFs offered by companies like Blackrock and Fidelity. Within one month of trading, Fidelity’s FBTC had gathered almost $3.5 billion in AUM, while BlackRock’s IBIT had attracted over $4 billion.

By comparison, the first gold ETF accumulated $1.2 billion in its first month. The ETF that held the previous record for fastest inflows was BlackRock’s Climate Conscious Fund, launched in August 2023, having collected $2.2 billion in its first month.

Challenges Prior to Approval

While first approval didn’t happen until January 10, 2024, the Bitcoin ETFs had been in the works for over a decade.

In July 2013, Cameron and Tyler Winklevoss, founders of the crypto exchange known as Gemini, filed the first application for a spot Bitcoin ETF. This was the same year that Grayscale Investments launched its Bitcoin Investment Trust, which would later be listed as a public security under the ticker “GBTC” in 2020. GBTC was the first publicly traded Bitcoin fund available in the US.

Between the years of 2013 and 2018, the Winklevoss twins were rejected multiple times by the Securities and Exchange Commission (SEC) for various ETF applications. Each time, the SEC claimed there were not sufficient regulatory controls in place for the crypto markets to safely launch such a product.

In 2021, the first Canadian spot Bitcoin ETF was launched. This was also the same year that current SEC chair Gary Gensler took his position.

In October 2021, the first Bitcoin futures ETF was launched. ProShares Bitcoin Trust was listed on the Chicago…

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