In 2024, the United States emerged as the largest investor in spot Bitcoin exchange-traded funds (ETFs), while Canada, which was the first country to launch a spot Bitcoin ETF, saw significant outflows.
US Spot Bitcoin ETFs Drive $44.2 Billion Inflows
According to data from CoinShares, US spot Bitcoin ETFs contributed to 100% of the $44.2 billion crypto exchange-traded product (ETP) inflows in 2024, making the US the world’s largest holder of Bitcoin ETFs in terms of assets under management (AUM). This is a staggering amount that underscores the popularity of these investment products among American investors.
Canada Sees Record Outflows
Meanwhile, Canada saw record crypto ETP outflows of $707 million in 2024. This is a significant decline from the $4.2 billion inflows seen in 2021, when Purpose Investments launched its Purpose Bitcoin ETF, making Canada the first country to debut spot Bitcoin ETFs.
Why Does the US Lead the World in Bitcoin ETFs?
The success of US Bitcoin ETFs can be attributed to several factors. One reason is that the US Securities and Exchange Commission (SEC) made a historic decision to approve spot BTC ETFs in January 2024, paving the way for these investment products.
Another reason is that the US has the largest ETF market globally, with over $10.5 trillion in assets under management (AUM). According to Matt Hougan, chief investment officer at Bitwise, "The US is by far the largest ETF market. The global ETF market is about $15 trillion; the US accounts for $10.5 trillion of that."
US Dominance in the Global ETF Market
Matt Mena, 21Shares’ crypto research strategist, added: "With decades of investor familiarity and trust in the ETF structure, the US has naturally become the dominant market for these products." The US is also the largest capital market globally, with the US stock market alone accounting for over 60% of the total global stock market capitalization.
US Investors More Adventurous and Open to Risk
James Butterfill, CoinShares’ head of research, said: "US investors have historically been more adventurous and open to risk opportunities, particularly in the technology space; it, therefore, comes as no surprise that their Bitcoin ETFs would become leaders in terms of AUM."
Canada’s Crypto ETF Outflows
The Canadian investment firm Purpose Investments launched its Purpose Bitcoin ETF in February 2021, making Canada the first country to debut spot Bitcoin ETFs. However, despite this early mover advantage, Canada saw significant outflows from its crypto ETPs in 2024.
Shift to US-Based Options
According to 21Shares’ Mena, the shift was a result of US Bitcoin ETFs offering greater liquidity, broader investor participation, and institutional support. "In essence, these Canadian ETFs benefited from a regulatory arbitrage over the US, where such products were unavailable," he noted.
What’s Next for Crypto ETFs?
With US Bitcoin ETFs dominating the global crypto ETF industry, it’s unlikely that another market will eclipse US AUM for Bitcoin products in the near future. However, European issuers are working to create more diverse and efficient ETPs, which may offer staking yields as an example.
Conclusion
The success of US spot Bitcoin ETFs is a testament to the country’s dominance in the global ETF market. With its large and liquid markets, decades of investor familiarity with ETFs, and a history of being open to risk opportunities, it’s no surprise that the US leads the world in Bitcoin ETFs.
However, as the crypto industry continues to evolve, we may see other markets emerge as competitors. For now, though, it seems unlikely that anyone will eclipse the US dominance in Bitcoin ETFs anytime soon.
Sources
- CoinShares
- 21Shares
- Bloomberg
- Reuters
