Author: Ben Strack, Blockworks; Compiled by Wuzhu, Jinse Finance
On the one-year anniversary of the launch of the spot Bit ETF in the US, James Seyffart of Bloomberg Intelligence told me that even the companies behind these products, who are more optimistic about these products, are surprised by the response to these products.
Fidelity Investments' digital asset strategy head Matt Horne confirmed this.
He mentioned that the demand for Bit from retail investors, advisors and institutions has exceeded the company's "optimistic" expectations. The net inflows into the Fidelity Wise Origin Bit Fund (FBTC) were $12.2 billion, second only to the $37.7 billion of the iShares Bit Trust Fund (IBIT) from BlackRock.
But will the Bit ETF market see a second downturn?
Horne explained that Fidelity has had "productive dialogues" with all client groups on the rising usage of Bit ETFs by 2025.
He also talked about this 16-year-old asset: "A longer history will allow us to continue portfolio research and better understand investors' risk tolerance and the role of Bit in portfolios."
Horne mentioned the "adoption range" of various client types. Related news is that Bitwise CEO Hunter Horsley said on X Space on Friday - using the terminology of Geoffrey Moore's "Crossing the Chasm" - we are moving out of the early adopter stage and into the "early majority".
Then, borrowing from Winston Churchill's words to describe the adoption of Bit ETFs, Horsley added that it feels we are at the "end of the beginning". He pointed out that exploring Bit as an opportunity is still on the "to-do list" of companies in the $30 trillion US wealth management industry.
But as Neena Mishra of Zacks Investment Research told me on Friday, whether the inflows into Bit ETFs in 2025 can catch up with/exceed last year's likely depends on market performance.
In the aforementioned BTC price crash, the US Bit Fund saw outflows of $569 million and $149 million on Wednesday and Friday respectively (the market was closed on Thursday in observance of Jimmy Carter).
Casey proposed a potential US strategic Bit reserve - Seyffart said this would drive ETF demand. But if Trump and crypto-friendly Congress fail to deliver on crypto-related commitments, BTC could retrace (and see outflows).
"While as more traditional investors use these ETFs, they may become a support for Bit prices as they rebalance to buy more on the downtrend, conversely they may also become sellers in the uptrend as they rebalance back to their target allocation levels in the longer term."
