Bitwise, a leading cryptocurrency investment firm, has revealed that spot Bitcoin exchange-traded funds (ETFs) have surpassed earlier predictions and achieved an impressive $59.1 billion in assets under management (AUM) within the first three months of this year. Many industry experts, including JP Morgan and NYDIG, had previously estimated an AUM of $36 billion and $30 billion respectively by the end of the year. However, the actual AUM is nearly twice as high as these predictions, indicating a promising trajectory for spot Bitcoin ETFs. CryptoQuant, Standard Chartered, and Bloomberg Intelligence have made even more optimistic forecasts, projecting an end-of-year AUM of approximately $100 billion and $150 billion.
The report also highlights that spot Bitcoin ETFs have outperformed two of the largest US gold ETFs during the first quarter, with $12 billion in inflows compared to $3 billion in gold ETF outflows. Additionally, spot Bitcoin ETF demand has significantly exceeded the new BTC production, with ETFs accumulating 2.8 times more BTC than miners produced during the first quarter.
Despite the success of Bitcoin ETFs, they still represent a minority of Bitcoin ownership, holding only 3.9% of all Bitcoin. The majority of Bitcoin is owned by individuals (57%), inactive accounts (17.6%), and other smaller categories.
The Bitwise report also highlights the impressive performance of Bitcoin, which has seen a 66.99% increase in value year-to-date, outperforming other traditional markets such as US equities, gold, and DM equities. Furthermore, the report emphasizes that Bitcoin has a low correlation (0.11) with the S&P 500, indicating it may serve as a diversification tool or hedge against conventional markets.
Bitwise’s Chief Investment Officer, Matt Hougan, believes that this report should instill a “staggeringly bullish” sentiment towards the crypto market. He suggests that the crypto market has been in a bull market for the past 1.25 years and that such bullish trends typically last for three years, implying sustained strong performance in the future.