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The Bitcoin (BTC) market has experienced a remarkable recovery this year, largely due to the growing popularity of Bitcoin ETFs. BTC reached an all-time high of $73,000 in the first quarter of this year, sparking a bullish trend that continues today with a recent high of $104,000.
Donald Trump's presidential election has had a big impact on this rise, especially over the past month. This is because Mr. Trump has positioned himself as the first president to support cryptocurrencies and has positioned the United States as the “cryptocurrency capital of the world.”
President Trump's positive stance on digital assets has increased optimism among investors, resulting in increased buying pressure from Bitcoin ETF providers such as BlackRock and Fidelity. Notably, the top 12 Bitcoin ETFs have emerged as the largest holders of BTC, with a combined asset value of over $100 billion.
This number represents one of the most successful ETF launches in financial history, with the 12 Spot Bitcoin ETFs currently holding a combined total of approximately 1.1 million BTC, which is more than the total amount in circulation. It is equivalent to about 5% of Bitcoin.
Bitcoin ETF expected to exceed inflows in 2024
In a recent report, crypto asset management firm Bitwise outlined three key factors that suggest Bitcoin ETFs will continue to see explosive growth in 2025. First, it's important to note that the first year of an ETF's operation is typically the slowest.
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A historical comparison with the gold ETF launched in 2004 shows a significant increase in inflows in subsequent years. For example, the gold ETF started at $2.6 billion in its first year, followed by $5.5 billion in its second year, and gradually increased in value over subsequent years.
The firm suggests that if the 12 U.S. spot Bitcoin ETFs follow a similar trajectory, they could see far more inflows in 2025 than in 2024.
Comparison of gold and Bitcoin ETF projections for 2025. Source: Bitwise
Another factor contributing to potential growth is the expected participation of major financial news companies. Companies such as Morgan Stanley, Merrill Lynch, Bank of America, and Wells Fargo have yet to fully deploy their asset management teams to promote Bitcoin ETFs.
As the regulatory environment becomes more favorable under the Trump administration, these financial institutions are expected to open up access to Bitcoin ETFs to their customers, potentially directing trillions of dollars into the crypto market.
Investors are “moving up the ladder”
Finally, Bitwise has identified a clear trend known among investors as “ladder up.” This pattern shows that initial small contributions to Bitcoin often lead to increased investments over time.
The asset management firm believes that many investors who entered the Bitcoin ETF market in 2024 will double their investments in 2025.
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The company’s claim that “3% is the new 1%” shows that Bitcoin is gaining acceptance as a bona fide asset class, leading investors to allocate more of their portfolios to cryptocurrencies. The company thinks so.
The daily chart shows that BTC recovered the $100,000 mark on Wednesday. Source: BTCUSDT on TradingView.com
At the time of writing, BTC was firming above $100,900 after falling 7% to $91,000 at the beginning of the month. In the past 24 hours, the price of the largest cryptocurrency on the market has increased by about 4%.
Featured image from DALL-E, chart from TradingView.com
