Author: Ben Strack, Blockworks; Compiler: Wuzhu, Golden Finance
On the first anniversary of the launch of spot Bitcoin ETFs in the United States, James Seyffart of Bloomberg Intelligence told me that even the companies behind these products, who are more bullish on them, have been surprised by the response to them.
Matt Horne, head of digital asset strategists at Fidelity Investments, confirmed this to me.
He mentioned that demand for Bitcoin from retail investors, advisors, and institutions has exceeded the company's "optimistic" expectations.Fidelity Wise Origin Bitcoin Fund (FBTC) had net inflows of $12.2 billion, second only to BlackRock's iShares Bitcoin Trust Fund (IBIT) ($37.7 billion).
But is the Bitcoin ETF market heading for a second downturn?
Horne explained that Fidelity has had “productive conversations” so far with all client segments about the rise in Bitcoin ETF usage through 2025.
He also said of the 16-year-old asset: “The longer history will allow us to continue to do portfolio research and better understand investor risk tolerance and the role of Bitcoin in a portfolio.”
Horne mentioned the “spectrum of adoption” across various client types. In related news, Bitwise CEO Hunter Horsley said on X-Space on Friday — using a term from Geoffrey Moore’s “Crossing the Chasm” — that we are moving out of the early adopter phase and into the “early majority.”
Then, borrowing a line from Winston Churchill to describe Bitcoin ETF adoption, Horsley added that it feels like we’re at the “end of the beginning.” He noted that exploring Bitcoin as an opportunity remains “on the to-do list” for firms in the $30 trillion U.S. wealth management industry.
But as Zacks Investment Research’s Neena Mishra told me Friday, whether 2025 BTC ETF inflows can match/exceed last year will likely depend on market performance.
Amid the aforementioned BTC price crash, U.S. Bitcoin Funds saw outflows of $569 million on Wednesday and $149 million on Friday (markets were closed on Thursday in honor of Jimmy Carter).
Casey raised the possibility of a strategic Bitcoin reserve for the U.S. — which Seyffart said would drive ETF demand. But if Trump and a crypto-friendly Congress fail to deliver on crypto-related promises, BTC could see a pullback (and outflows).
“Though as more traditional investors use these ETFs, they could become support for the price of Bitcoin as they rebalance on the downside by buying more,” Seyffart said. “Conversely, they could also become sellers on the upside as they rebalance to their target allocation levels over the long term.”
Catherine
