Bitcoin over $100K: will bitcoin ETFs surge too?

Bitcoin price surges past $100,000 mark for the first time, during this rally, Bitcoin ETFs have also experienced strong trading activity this year, US Bitcoin ETFs surge with record $7.6 billion Influx.

These are Grayscale Bitcoin Trust ETF (GBTC Quick QuoteGBTC - Free Report) , BlackRock iShares Bitcoin Trust (IBIT Quick QuoteIBIT - Free Report) , Fidelity Wise Origin Bitcoin Trust (FBTC Quick QuoteFBTC - Free Report) , ARK 21Shares Bitcoin ETF (ARKB Quick QuoteARKB - Free Report) and Bitwise Bitcoin ETF (BITB Quick QuoteBITB - Free Report)

Trump Era

President-elect Donald Trump has ushered in a new era of more favorable U.S. regulations for cryptocurrency. He has pledged to make the United States “the crypto capital of the planet.” Recently, Trump nominated Paul Atkins as chair of the Securities and Exchange Commission, fulfilling a key campaign promise to the crypto community. Atkins is regarded as a crypto-friendly choice for this important role.

Additional developments, such as Elon Musk leading the newly formed Department of Government Efficiency and the intention to create a dedicated White House position for crypto policy, have further fueled this remarkable rally. Trump also intends to establish a national Bitcoin reserve, underscoring his strong personal and policy commitment to digital assets.

ETFs Launch

The approval of U.S.-listed Bitcoin ETFs earlier this year has significantly contributed to Bitcoin's rise. Previously blocked by the SEC over investor protection concerns, these funds now enable a broad range of investors to gain exposure to Bitcoin without directly owning the asset, highlighting the potential for cryptocurrency to become a mainstream investment. Record capital inflows into Bitcoin ETFs are a testament to this trend.

In November, Bitcoin ETFs experienced unprecedented inflows of approximately $6.4 billion, followed by an additional $1 billion in the first few days of December. This surge reflects increasing confidence in Bitcoin ETFs as they gain traction among mainstream investors.

Options trading for spot Bitcoin ETFs began on November 19, with BlackRock being the first to offer options for the BlackRock iShares Bitcoin Trust (IBIT). Grayscale and Bitwise are set to follow, with Grayscale launching options for its Grayscale Bitcoin Trust (GBTC) and Bitcoin Mini Trust (BTC), while Bitwise will soon introduce options for the Bitwise Bitcoin ETF Trust (BITB). Other ETFs, like the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB), are also expected to offer options soon.

Institutional Investing

MicroStrategy (MSTR) is aggressively increasing its Bitcoin holdings. Between November 25 and December 1, the company acquired 15,400 bitcoins, investing $1.5 billion. This follows prior purchases of over 27,000 bitcoins from October 31 to November 10. Currently, MicroStrategy holds approximately $30 billion in Bitcoin, which has further fueled enthusiasm in the cryptocurrency markets.

Grayscale Bitcoin Trust (GBTC) – Up 119.4%

Grayscale Bitcoin Trust is the pioneering Bitcoin ETF that allows investors to gain exposure to Bitcoin as a security, circumventing the complexities of purchasing, storing, and safeguarding Bitcoin directly. The trust holds actual Bitcoins through its custodian, Coinbase Custody. With an assets under management (AUM) of $20.8 billion, Grayscale Bitcoin Trust charges an annual fee of 1.50%. It typically trades an average of 4 million shares daily, making it a cost-effective option for Bitcoin exposure.

BlackRock iShares Bitcoin Trust (IBIT) – Up 119%

The iShares Bitcoin Trust aims to mirror the performance of Bitcoin’s price, offering investors the ability to access Bitcoin through a traditional brokerage account. This fund charges a low annual fee of 25 basis points and has an AUM of $48 billion. It enjoys robust trading activity, with an average daily volume of 44 million shares (read: November Turns S&P 500's Best Month in 2024: ETF Area Winners).

Fidelity Wise Origin Bitcoin Trust (FBTC) – Up 112%

Fidelity Wise Origin Bitcoin Trust provides investors with exposure to Bitcoin's price without the need to purchase Bitcoin directly through brokerage, trust, or tax-advantaged accounts. The trust has built an asset base of $19 billion and charges an annual fee of 25 basis points. It trades an average of 6 million shares daily.

ARK 21Shares Bitcoin ETF (ARKB) – Up 111.4%

The ARK 21Shares Bitcoin ETF has gathered an asset base of $4.7 billion. Its goal is to track Bitcoin's performance as measured by the CME CF Bitcoin Reference Rate – New York Variant. The fund features an expense ratio of 0.21% and enjoys an average daily trading volume of 1.6 million shares.

Bitwise Bitcoin ETF (BITB Quick QuoteBITB - Free Report) – Up 111.2%

With an AUM of $4 billion, Bitwise Bitcoin ETF invests directly in Bitcoin and is easily accessible from a brokerage account. It has the lowest fees among spot Bitcoin ETFs at 0.20% and trades in a volume of 2.6 million shares per day on average.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.