Bitcoin’s Path to the Most Successful ETP Launch Ever

Happy one-year anniversary to the spot Bitcoin ETPs! It’s been a long journey—over 10 years, in fact. The first spot Bitcoin ETP was filed by the Winklevoss twins back in 2013, and while it faced repeated hurdles, we finally made it happen. When I first got into crypto in 2017, the buzz around spot Bitcoin ETPs was already deafening. It felt like we were on the verge of something monumental. Later that year, when the CME launched Bitcoin futures in November, optimism reached new heights—many believed spot Bitcoin ETPs were imminent.

Fast forward to today, and Bitcoin spot ETPs have rewritten history, becoming the most successful ETP launch of all time. With cumulative net inflows exceeding $37 billion in just one year, they’ve already outpaced the $34.5 billion in net inflows accumulated by all gold ETPs over the past decade. To put this into perspective, Bitcoin ETPs have seen more net inflows in one year than gold ETPs did in their first seven years combined—a testament to the overwhelming demand and growing confidence in Bitcoin as an investment.

Figure 1: Cumulative Spot BTC ETP Net Flows 2024

Source: 21Shares, Bloomberg

In just one year, these ETPs have achieved remarkable success, holding more assets under management (AUM) than all commodity ETPs (excluding gold) combined. They’re now within striking distance of surpassing the cumulative AUM of all gold ETPs—a milestone that underscores the growing confidence in Bitcoin as a digital store of value.

Figure 2: Cumulative AUM: Spot BTC ETP vs Gold vs Silver vs Other Commodities

Source: 21Shares, ETF Action

But that’s not all. Spot Bitcoin ETPs have recorded more net inflows than technology ETPs over the past year, showcasing a seismic shift in investor sentiment. Incredibly, these inflows are more than 10 times those of gold ETPs in 2024—a testament to Bitcoin’s increasing appeal among both retail and institutional investors. The success of spot Bitcoin ETPs demonstrate a broader trend: Bitcoin is no longer seen as a niche asset. It’s maturing into a globally recognized investment vehicle, offering exposure to an emerging asset class that’s reshaping the financial landscape.

Evolution of BTC ETPs

The journey of Bitcoin spot exchange-traded products (ETPs) has been a story of innovation, resilience, and transformative milestones. From the first attempts to bring Bitcoin into regulated investment vehicles a decade ago to the record-breaking success of spot Bitcoin ETPs today, this evolution highlights the growing institutional acceptance and global demand for digital assets. Key moments, from early filings and groundbreaking launches to regulatory battles and eventual triumphs, have shaped Bitcoin’s transition from a niche asset to a potential cornerstone of modern investment portfolios. Below is a timeline detailing the critical milestones in the evolution of Bitcoin ETPs, charting their path from concept to global success.

2013:

• July: The Winklevoss twins filed the first-ever Bitcoin ETP application with the SEC.some text
  • Although the application was rejected, it sparked global interest in regulated Bitcoin investment vehicles.

2017:

• November: CME Bitcoin Futures begin trading, paving the way for crypto ETPs in the US

2018:

• November: 21Shares launched the world’s first physically-backed crypto ETP.

2021:

• February: Canada approves North America’s first Bitcoin spot ETP.some text
  • This marked a turning point in institutional adoption of Bitcoin through ETPs in the Americas.
• May: 21Shares/ARK were the first to file for a spot Bitcoin ETP among the 10 filings that would ultimately receive approval in 2024.
• October: The U.S. approves its first Bitcoin futures ETPs, but spot Bitcoin ETPs remain unapproved.

2022:

• June: Grayscale sued the SEC, arguing that the agency's rejection of their Bitcoin ETP filing was arbitrary and inconsistent, particularly in light of the approval of Bitcoin futures ETPs.

2023:

• June: Fidelity and BlackRock’s filing for a Bitcoin spot ETP in the U.S. reignited institutional interest after years of SEC rejections.some text
  • The filing, along with others, signaled growing momentum for regulatory approval.
• August: SEC loses case against Grayscale, finally clearing the way for the agency’s approval of spot BTC ETPs.

2024:

• January: Spot BTC ETPs begin trading for the first time in the USsome text
  • Within one year, these ETPs became the most successful ETP launches in history, amassing over $36.2 billion in net inflows. This milestone redefined Bitcoin’s role in global investment portfolios

Investment Case for Bitcoin

Bitcoin has emerged as a unique asset class, offering compelling investment opportunities driven by its fundamental properties, growing adoption, and macroeconomic trends. As the world’s first decentralized digital currency, Bitcoin combines the scarcity of gold with the accessibility and portability of digital technology, making it an attractive addition to a diversified investment portfolio. Below, we outline the core pillars of Bitcoin’s investment case:

1. Digital Store of Value

Bitcoin’s fixed supply of 21 million coins makes it inherently scarce, akin to gold. However, Bitcoin surpasses traditional stores of value in accessibility, divisibility, and portability, enabling seamless global transactions without the need for intermediaries. As macroeconomic uncertainty and fiat currency devaluation persist, Bitcoin is increasingly seen as a hedge against inflation, hedge against monetary debasement, and a store of value in a digital-first world.

2. Institutional Adoption and Liquidity Growth

The approval of Bitcoin spot ETPs, particularly in the U.S., marks a turning point in institutional acceptance. These vehicles provide investors with regulated and simplified exposure to Bitcoin, driving liquidity and further legitimizing the asset. Bitcoin ETPs have already achieved record-breaking net inflows, showcasing the growing confidence of retail and institutional investors alike.

3. Decentralization and Network Security

Bitcoin’s decentralized network is powered by a robust proof-of-work consensus mechanism, supported by miners worldwide. This architecture ensures unmatched security and censorship resistance, and immutability, giving investors confidence in the network’s integrity. Bitcoin’s decentralized nature also protects it from geopolitical risks and centralized control.

4. Macro Trends Favoring Bitcoin

Global economic conditions continue to bolster Bitcoin’s appeal. With central banks adopting loose monetary policies over the past decade, concerns about fiat currency stability have grown. Bitcoin’s programmatic monetary policy, a predictable issuance rate and capped supply, offers an alternative to traditional fiat systems.

5. Portfolio Diversification

As shown in figure 3, Bitcoin exhibits low correlation with traditional financial markets, including equities and fixed income. This unique characteristic makes it an effective tool for diversification, helping to reduce overall portfolio risk while providing exposure to a high-growth asset. Historical data indicates that even a small allocation to Bitcoin—typically in the range of 1-5%—is where most investors find the "sweet spot" for balancing risk and return. This modest allocation has been shown to significantly improve a portfolio's Sharpe ratio, a key measure of risk-adjusted performance. In fact, Bitcoin’s inclusion can help bring a portfolio’s Sharpe ratio above 1.0, a benchmark that has become increasingly difficult to achieve in today’s low-yield and volatile market environment. By incorporating Bitcoin, investors can position themselves to capture the benefits of diversification and improved performance.

Figure 3: Bitcoin’s 30-Day Rolling Correlation to other Asset Classes

Source: 21Shares

6. Growing Use Cases and Network Effects

Bitcoin’s use cases extend beyond investment. It is increasingly used for cross-border payments, remittances, and as a medium of exchange in regions with economic instability. Its growing network effects, supported by developments like the Lightning Network, continue to expand Bitcoin’s utility and adoption globally.

7. Proven Track Record and Resilience

Bitcoin has demonstrated remarkable resilience and growth since its inception in 2009. Over the past decade, it has evolved from a niche experiment among cryptographers to a globally recognized asset class with a market capitalization exceeding $2 trillion. Despite periods of volatility, including multiple drawdowns of over 75%, Bitcoin has consistently rebounded, not only recovering but also reaching multiples of its previous all-time highs each time. This unparalleled ability to recover from market downturns has delivered long-term returns that far exceed those of traditional assets like equities, gold, and bonds. Its adoption by major corporations, financial institutions, and governments further reinforces its legitimacy and staying power. Bitcoin’s proven track record as a durable and innovative financial asset makes it a compelling choice for long-term investors seeking growth and resilience in an ever-changing economic landscape.

2025 Predictions: Future Outlook for Bitcoin ETPs

The future of Bitcoin looks brighter than ever as it continues to gain global recognition and adoption across financial markets and institutions. Here are five key developments to watch:

The Cumulative AUM of Bitcoin ETPs Will Surpass—and Double—Gold’s

We predict that the cumulative AUM of Bitcoin ETPs will not only surpass that of gold ETPs but ultimately double it, marking an unprecedented milestone in the evolution of Bitcoin as a global investment asset. This shift will reflect the growing preference among investors for Bitcoin as a digital store of value, offering a modern alternative to gold in portfolios.

Nation-State Adoption as a Reserve Asset

Bitcoin’s recognition as a strategic reserve asset will grow with multiple countries adopting it to diversify their reserves. This adoption won’t be limited to smaller economies; major GDP players such as the United States, Argentina, and Brazil are expected to lead this charge. As economic uncertainty persists, Bitcoin’s decentralized and deflationary nature makes it an attractive choice for governments seeking alternative reserve strategies.

Companies Adopt the Bitcoin MicroStrategy 

Building on this momentum, we anticipate more companies following the lead of MicroStrategy by adding Bitcoin to their balance sheets as a strategic reserve asset. This trend is already gaining traction, with companies like Semler Scientific making substantial weekly Bitcoin purchases, bringing their total holdings to over $221 million. Such corporate adoption underscores the growing recognition of Bitcoin as a long-term store of value and a hedge against inflation, further solidifying its role in corporate treasury strategies.

Record-Breaking Inflows into Bitcoin ETPs

Building on last year’s extraordinary inflows, 2025 is poised to set new records for net capital entering Bitcoin ETPs. Increased regulatory clarity, broader institutional participation, growing corporate and nation-state interest, and rising retail demand will drive these inflows, further cementing Bitcoin’s place as a mainstream investment asset.

Bitcoin ETP Poised to Become a Top 5 ETP Globally by AUM

The rapid growth of Bitcoin spot ETPs will propel at least one of these products into the ranks of the top 5 ETPs globally by AUM. This achievement will highlight Bitcoin’s ascent as a dominant force in global financial markets, rivaling traditional asset classes.

Figure 4: World Largest ETFs by AUM

Source: 21Shares, ETF Action

Emergence of Exotic Bitcoin ETP Strategies

Innovation in Bitcoin investment vehicles will expand, with the launch of more exotic ETP strategies such as buffer products, which provide downside protection, and covered call strategies, which generate income. These new products will appeal to a broader range of investors, from those seeking risk mitigation to those pursuing yield-enhancing opportunities.

Bitcoin’s future is one of growth, innovation, and increasing integration into the global financial system. These developments will further establish it as an increasingly important asset in the portfolios of retail and institutional investors alike.

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