- Spot Bitcoin ETFs surpass $150B in capital, holding over 6% of Bitcoin’s total supply.
- IBIT leads with $87.5B AUM as ETF inflows outpace new Bitcoin issuance post-halving.
- ETF structure boosts access but adds risks like fees, volatility, and custodian reliance.
Spot Bitcoin exchange-traded funds (ETFs) have raised over $150 billion in capital since receiving regulatory approval in January 2024, marking one of the most largest developments in the merge of digital assets and traditional finance.
These ETFs, which trade on conventional stock exchanges, supply exposure to actual Bitcoin holdings, removing the need for investors to interact directly with cryptocurrency infrastructure. The launch has redefined market access for both retail and institutional participants and greatly altered Bitcoin’s supply and demand dynamics.
How Spot Bitcoin ETFs Function
Spot Bitcoin ETFs are built to hold actual Bitcoin, unlike futures-based ETFs that rely on derivatives. ETF issuers such as BlackRock and Fidelity collaborate with Authorized Participants (APs) who acquire Bitcoin from the open market and deliver it to the ETF fund in exchange for shares. This creation and redemption mechanism ensures the ETF’s market price stays closely aligned with Bitcoin’s net asset value.
The ETFs store Bitcoin with custodians like Coinbase Custody, while Fidelity uses its in-house solution. These custodians uphold security protocols that meet institutional standards. Trading activity, however, remains limited to market hours, despite Bitcoin’s 24/7 trading nature.
Market Impact and Performance Trends
Since their debut, the ETFs have had a measurable effect on the Bitcoin market. On launch day alone, they recorded $4.6 billion in trading volume. By July 2025, spot Bitcoin ETFs collectively held over 1.29 million BTC, representing more than 6% of total supply.
This has coincided with a 160% increase in Bitcoin’s price since January 2024. After the April 2024 halving event, which cut block rewards in half, daily net inflows from funds like IBIT and FBTC surpassed the amount of new Bitcoin created by miners.
The iShares Bitcoin Trust (IBIT), managed by BlackRock, leads with $87.5 billion in assets under management and an average daily trading volume exceeding $2 billion. Fidelity’s Wise Origin Bitcoin Fund (FBTC) follows with $24.6 billion in assets.
Grayscale GBTC, which already controls 22 billion, has seen a significant drop in the trading volume because of its expense next to its peers; the 1.50% expense ratio. Bitwise and ARK 21Shares have lower-fee funds with smaller asset pools that are targeting niche investor groups.
