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Spot Bitcoin ETPs Dominate Even as Ether Offers Alternatives

November 22, 2024 | 1 minutes reading time | By John Hintze

Institutional interest is affected by staking methods and due-diligence requirements.

When the U.S. Securities and Exchange Commission reversed course and approved the listing and trading of bitcoin exchange-traded products (ETPs), it was following a court ruling by taking what Chair Gary Gensler said was “the most sustainable path forward.” He concluded his accompanying statement last January 10 by saying, “We did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

Pent-up demand was awaiting the new products – often referred to as exchange-traded funds (ETFs), which are a type of ETP that holds regulated securities under the Investment Company Act of 1940. The biggest spot bitcoin fund, BlackRock’s iShares Bitcoin Trust (IBIT), grew to more than $40 billion in assets under management as of November 15. The next-ranked Grayscale and Fidelity funds’ AUMs were under $20 billion.

Spot crypto ETP inflows surged, along with the price of bitcoin, following the presidential election victory of Donald Trump, who had taken pro-crypto positions.

Spot ether ETPs, holding the second-biggest cryptocurrency by market...

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