The rise of Bitcoin ETFs
Bitcoin ETFs are investment vehicles that allow institutional and retail investors to gain exposure to Bitcoin without directly owning or managing the cryptocurrency.
Since the US Securities and Exchange Commission approved spot Bitcoin ETFs in January 2024, the market has grown substantially.
By Q4 2024, institutional holdings in US Bitcoin ETFs surged to $27.4 billion, a 114% increase from the previous quarter. This rapid adoption showcases the growing institutional interest in cryptocurrency exposure.Major players like BlackRock, Fidelity, VanEck, ARK Invest and Grayscale now manage Bitcoin ETFs. BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) are among the well-known offerings. Institutional adoption of Bitcoin ETFs is accelerating. Registered investment advisers (RIAs) have become top holders of spot Bitcoin ETFs, reflecting growing confidence in the asset class. In June 2025, investment advisers held over $10.3 billion in spot Bitcoin ETFs, nearly half of total institutional assets.Family offices and wealth managers are also exploring crypto investments. A 2024 BNY Mellon report indicates that 39% of single-family offices are actively investing or considering crypto investments, driven by client demand and strategic analysis.
ETFs have made it easier for institutions to enter the Bitcoin market while satisfying regulatory compliance and internal risk frameworks. BlackRock recommends a portfolio allocation of up to 1-2% in Bitcoin, citing its potential for diversification and return enhancement.
Bitcoin vs bonds: Risk and return
The trade-off between risk and return is central when comparing Bitcoin ETFs to bonds.
Bitcoin’s historical performance has been characterized by high volatility and substantial returns. Let’s see how:
In 2024, Bitcoin returned 114%, outperforming major asset classes. However, its annualized volatility is about 50%, significantly higher than bonds and equities.Traditional…..
