In 2024, the United States became the leading nation in investing in Bitcoin exchange-traded funds (ETFs) that trade directly on the market, whereas Canada, which initially introduced such a fund, saw significant losses as one of the top contenders.
In the year 2024, U.S.-based Bitcoin (BTC) ETFs attracted all $44.2 billion of inflows into crypto exchange-traded products (ETPs), placing the U.S. as the global leader in managing assets for Bitcoin ETFs.
In 2024, Switzerland ranked as the second-largest purchaser of cryptocurrency Exchange-Traded Products (ETPs), but the inflow of funds into these products amounted to just $630 million – a staggering 98% difference when compared to the inflows in the United States.
In 2024, Canada experienced large withdrawals of $707 million from cryptocurrency exchange-traded products (ETPs), marking a significant trend as investors turned towards more fluid options based in the United States, following Canada’s introduction of the first physically-settled Bitcoin ETF in 2021.
Why does the US lead the world in Bitcoin ETFs?
In the year following the U.S. Securities and Exchange Commission’s groundbreaking decision to greenlight spot Bitcoin ETFs in January 2024, these ETFs have seen significant success.
It’s not surprising that the United States leads in Bitcoin ETFs, considering it’s the world’s largest market for Exchange-Traded Funds (ETFs).
In terms of the Exchange-Traded Fund (ETF) market, the United States holds a dominant position. In fact, out of a total global ETF market value of approximately $15 trillion, the U.S. accounts for an impressive $10.5 trillion. This leadership in the ETF sector is not surprising.” – Matt Hougan, chief investment officer at Bitwise, speaking to CryptoMoon.
21Shares’ crypto research strategist Matt Mena shared with CryptoMoon that the United States is where Exchange-Traded Funds (ETFs) originated and holds over 70% of the total assets under management (AUM) in ETFs worldwide.
“With decades of investor familiarity and trust in the ETF structure, the US has naturally become the dominant market for these products.”
As a global analyst, I’d like to highlight that I’m part of a market where the U.S. dominates as the leading capital market worldwide. In fact, the American stock market alone represents more than 60% of the entire global stock market capitalization, a testament to its significant influence on the global financial landscape.
James Butterfill, head of research at CoinShares, explained that American investors tend to be more daring and open to risky investments, especially in technology. Given this trend, it’s not unexpected that Bitcoin ETFs from the US would lead in terms of total assets under management.
Canada crypto ETFs: $4.2 billion inflows in 2021 vs. $707 million outflows in 2024
2024 marked the year with the highest-ever withdrawals from Canadian crypto Exchange-Traded Products (ETPs), amounting to approximately $707 million, as per information provided by CoinShares.
Canada’s 2024 crypto ETF outflows surpassed its previous record outflows of $151 million in 2022.
As an analyst, I’m proud to have played a role in the launch of the Purpose Bitcoin ETF by Purpose Investments in February 2021. This groundbreaking event made Canada the pioneer globally, as we were the first nation to introduce spot Bitcoin ETFs.
In a spectacular start, the world’s initial Bitcoin ETF that focuses on spots saw a whopping $564 million in assets under management within five days following its market debut. After its launch, Canadian crypto-based Exchange Traded Products (ETPs) collectively attracted inflows worth approximately $4.2 billion over their first year of trading.
Canadian crypto ETF investors switch to US-based options
2024 saw significant Bitcoin ETF withdrawals in Canada, largely because investors changed their strategies after the introduction of U.S. spot Bitcoin ETFs, according to remarks made by 21Shares.
The change occurred due to U.S. Bitcoin ETFs providing enhanced liquidity, wider investment opportunities for individual investors, as well as backing from institutions.
He pointed out that these Canadian ETFs essentially profited from a regulatory loophol, as similar products weren’t available in the U.S.
“Once spot Bitcoin ETFs began trading in the US, a significant number of non-Canadian domiciled investors swiftly pulled their funds from the Canadian ETFs and moved into the US-domiciled products.”
2024 saw outflows for cryptocurrency ETFs in Canada, making them the sole ETF category experiencing such a trend within the country, as reported by Bloomberg.
In other words, as U.S. Bitcoin ETFs currently lead the worldwide cryptocurrency ETF sector, it seems improbable that any other market will surpass the U.S.’s assets under management (AUM) in Bitcoin-related products, according to CoinShares’ Butterfill.
Currently, European entities like ours possess a significantly broader variety of Exchange-Traded Products (ETPs) related to cryptocurrencies, as well as more streamlined settlement procedures for crypto ETFs. These advantages include the ability to provide staking rewards within ETPs, which serves as an illustrative example.
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2025-01-10 12:08