The crypto ETF market is witnessing significant developments as major issuers plan new crypto-focused funds for 2025, following an exceptional year that saw record-breaking inflows and the historic approval of spot Bitcoin and Ethereum ETFs.
BlackRock's Bitcoin ETF Faces Early 2025 Headwinds
BlackRock's iShares Bitcoin Trust (IBIT) started 2025 with its largest-ever single-day outflow of $332.6 million on January 2, marking three consecutive days of redemptions. This significant withdrawal surpassed the previous record of $188.7 million set on December 24, 2024, bringing the total weekly outflow to $392.6 million.
Despite these recent outflows, IBIT's position remains strong in the broader ETF market. The fund ranked third among all U.S.-listed ETFs in 2024, accumulating $37.2 billion in net inflows, trailing only traditional powerhouses like the Vanguard 500 Index Fund and iShares Core S&P 500 ETF.
New Wave of Crypto ETF Innovation
Bloomberg Intelligence analyst Athanasios Psarofagis anticipates increased ETF filings in 2025. "This is the continued evolution of launches to incorporate crypto strategies into ETFs," he noted, referring to the successful launch of spot Bitcoin and Ethereum ETFs in 2024. "It's the hot thing — issuers love to strike when the theme is hot. We'll see crypto everything."
Several innovative products have already been filed with the SEC. ProShares has proposed a fund denominating S&P 500 returns in Bitcoin, while Strive Asset Management and REX Shares are exploring products focused on convertible bonds and derivatives. Volatility Shares has filed for a Solana fund and a related futures-tracking vehicle.
"This is the evolution of the crypto ETF spectrum," explained Todd Sohn, ETF strategist at Strategas. "Futures-based, spot, thematic, and now convertibles, both hyper-specific for MicroStrategy and whoever else gets involved in a similar capacity."
2024 Performance Sets High Bar
The U.S. spot Bitcoin ETF market exceeded expectations in 2024, generating $35.66 billion in net inflows. BlackRock's IBIT led with $37.31 billion, followed by Fidelity's Wise Origin Bitcoin Fund at $11.84 billion and ARK's 21Shares Bitcoin ETF with $2.49 billion. The Bitwise Bitcoin ETF also showed strong performance with $2.19 billion in inflows.
In the Ethereum ETF space, BlackRock's iShares Ethereum Trust ETF and Fidelity Ethereum Fund dominated with $3.52 billion and $1.56 billion in inflows respectively. Grayscale's Ethereum Mini Trust ETF secured $608.1 million, while the Bitwise Ethereum ETF surpassed $400 million. 2025 Market Predictions
Nate Geraci, President of ETF Store and co-founder of the ETF Institute, shared his confident predictions for 2025's crypto ETF landscape. He anticipates the launch of combined spot Bitcoin and Ethereum ETFs, the introduction of spot Ethereum ETF options trading, and the approval of spot Solana ETFs.
Bitcoin pioneer Adam Back suggested that crypto ETFs could potentially outperform traditional stock ETFs in terms of inflows during 2025, particularly if Bitcoin prices continue their upward trajectory. This optimism follows Bitcoin's remarkable performance in late 2024, when it surpassed $100,000 on December 5.
Market Dynamics Show Shifting Preferences
While BlackRock's IBIT experienced significant outflows in early January 2025, other providers saw positive flows. On January 2, Bitwise, Fidelity, and Ark 21Shares recorded inflows of $48.3 million, $36.2 million, and $16.5 million respectively. Grayscale's Bitcoin Mini Trust added $6.9 million, though its GBTC fund saw an outflow of $23.1 million.
The overall cryptocurrency ETF market recorded a net outflow of $242 million on January 2, primarily due to BlackRock's performance offsetting gains in other funds. However, this follows a record-breaking fourth quarter in 2024, where ETFs collectively saw over $430 billion in inflows, with November and December posting the highest monthly inflow totals ever, contributing to 2024's record $1.15 trillion in total ETF inflows.
As the crypto ETF market continues to mature and evolve, 2025 promises to be another transformative year with new product launches and potentially shifting market dynamics. The success of these products will likely depend on broader crypto market performance and regulatory developments in the coming months.