Spot Bitcoin ETFs Approach First Anniversary

Spot Bitcoin exchange-traded funds (ETFs) are nearing their first anniversary, with trading volumes approaching $600 billion as of December 5. The launch of these ETFs in January marked the unofficial start of the current bull run, which peaked last week when Bitcoin's price surpassed $100,000 for the first time.

At The Block's Emergence conference in Prague, industry leaders highlighted economic, political, and technological factors over the past year that contributed to this milestone.

Hany Rashwan, co-founder and CEO of 21Shares, stated, "We’re seeing an inflection point in the global order for the first time in a long time. We’re seeing a threat to the reserve currency status of the U.S. dollar… We’re entering a period where many will make significant moves."

21 Shares boasts 53 exchange-traded products in Europe, with the ARK 21Shares Bitcoin ETF (ticker: ARKB) being one of 11 that debuted in the U.S. market in January. The popularity of these funds helped Bitcoin surpass $70,000 in March. Following a price correction over the summer, new momentum arrived with the reelection of Donald Trump, a pro-crypto candidate.

Daniel Seifert, VP and regional managing director at Coinbase, noted that major institutional players are backing Bitcoin ETFs, highlighting BlackRock as a key player. The BlackRock iShares Bitcoin Trust (IBIT) recently crossed 500,000 BTC (approximately $48 billion) in assets. BlackRock CEO Larry Fink admitted in July that he previously underestimated cryptocurrency.

“BlackRock surpassing 500,000 BTC is yet another huge milestone after a tremendous launch year,” said K33 Head of Research Vetle Lunde. BlackRock’s ETF remains the third strongest instrument in the U.S. by year-to-date flow, ahead of Invesco's QQQ.

The rise of stablecoin adoption has further driven crypto demand, according to John Svolos from SkyBridge Capital. He noted the growing prominence of the U.S. dollar stablecoin as a significant factor impacting Bitcoin's demand. Tether's USDT, the world’s largest U.S. dollar-pegged stablecoin, has experienced a surge in market cap due to inflows into Bitcoin ETFs.

Tether CEO Paolo Ardoino reported that Tether’s market cap increased by approximately $16 billion in the last three weeks, largely attributable to inflows into spot Bitcoin ETFs. Following the U.S. elections, Bitcoin's price has risen by 30%, trading around $97,800 at the time of publication.