The launch of Bitcoin ETFs in January 2024 was heralded as a groundbreaking moment for the market. Many expected these results to open the floodgates for institutional capital and Bitcoin prices to new heights. But now, a year later, have Bitcoin ETFs delivered on their promise?
For a more in-depth look at this topic, check out a recent YouTube video here: Have Bitcoin ETFs Lived Up to Expectations?
Start strong
Since launch, Bitcoin ETF has accumulated more than 1 million BTCequivalent to approximately $40 billion in assets under management. Even when accounting for outflows from competing products such as the Grayscale Bitcoin Trust (GBTC), which saw a withdrawal of over 400,000 BTC, the net inflow is still significant at around 540,000 BTC.
To put this into perspective, the size of the inflow is far greater than what we saw when the first gold ETFs were launched in 2004. Gold ETFs collected $3.45 billion in their first year, a fraction of an inflow of $37.5 billion Bitcoins over the same period. . This highlights the intense institutional interest in Bitcoin as a financial asset.
Bitcoin year growth
After the launch of Bitcoin ETF, initial price movements were very low, with Bitcoin declining almost 20% in a “buy the rumor, sell the news” scenario. However, this bearish trend quickly reversed. Over the past year, Bitcoin prices have increased by about 120%, reaching new heights. For comparison, the first year after the launch of gold ETFs saw a modest increase in the price of 9% for gold.
Following the Golden Fractal
When you consider Bitcoin's 24/7 trading schedule, which results in approximately 5.3 times more annual trading hours than gold, a surprising appearance emerges. By overlaying the first year of Bitcoin ETF price action with gold historical data (adjusted for trading hours), we see almost the same % return. If Bitcoin continues to follow the gold pattern, we could see an additional price increase of 83% by mid-2025, which could push the price of Bitcoin to around $188,000.
Institutional Strategy
One interesting insight from Bitcoin ETFs is the relationship between income and price movements. A simple strategy of buying Bitcoin on days with positive ETF inflows and selling on days with outflows has consistently outperformed the traditional buy-and-hold approach. From January 2024 to today, this strategy has returned 130%, compared to ~100% for a buy and hold investor, an outperformance of almost 10%.
For more information on this institutional inflow strategy, watch the following video:
Using ETF Data to Outperform Bitcoin (Must Watch)
Dynamics of Supply and Demand
While the Bitcoin ETF has accumulated more than 1 million BTC, this represents only a small fraction of Bitcoin's total circulating supply of 19.8 million BTC. Corporations like MicroStrategy also contributed to institutional adoption, both holding hundreds of thousands of BTC. However, the majority of Bitcoin is still in the hands of individual investors, ensuring that market dynamics are still driven by decentralized supply and demand.
Decision
One year later, Bitcoin ETFs have exceeded expectations. With billions in inflows, significant impact on price valuation, and increasing institutional adoption, they have cemented their role as a key driver in the Bitcoin market narrative. Although some early skeptics were disappointed by the lack of immediate explosive price action, the long-term outlook remains very positive.
The comparison with gold ETFs provides a strong roadmap for the future of Bitcoin. If the gold fractal is real, we could be on the verge of another massive cluster. Coupled with favorable macroeconomic conditions and growing institutional interest, Bitcoin's future looks brighter than ever.
Explore live data, charts, indicators, and in-depth research to stay ahead of Bitcoin price action at Bitcoin Pro Magazine.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research before making any investment decisions.
