Retail Investors Drive 80% of Bitcoin ETF Demand

Recent research from Binance indicates that Bitcoin ETFs now represent an average of 26.4% of Bitcoin’s spot trading volume, with occasional spikes reaching as high as 62.6%. This trend has played a role in Bitcoin’s increasing dominance in the market.

The growth of Bitcoin ETFs has surpassed that of initial Gold ETFs, as net inflows have exceeded $18.9 billion within just a year. More than 1,200 institutions have participated in Bitcoin ETFs, a stark contrast to the mere 95 institutions that supported Gold ETFs during their early days.

Retail Investors Lead Bitcoin ETF Investments

Retail investors account for 80% of the demand for Bitcoin ETFs, while the involvement of institutional investors has increased by 30% since the first quarter. Investment advisors have witnessed the most significant growth, with a 44.2% rise in their holdings.

Read More: What Is a Bitcoin ETF?

While the full integration of Bitcoin ETFs into the operations of broker-dealers, banks, and advisors is expected to take years, this gradual evolution is anticipated to promote broader acceptance in the medium term, as suggested by a recent Binance Research report shared with BeInCrypto.

Increasing interest in cryptocurrencies through ETFs is evident, with 45% of ETF investors planning to invest in digital assets within the next year. This positions crypto ETFs as the second most favored asset class after equities, surpassing demand for bonds and alternative investments.

“Gold saw over 1 million ounces in ETF inflows last week, marking the largest influx since October 2022—truly remarkable! History suggests that when excitement around gold subsides, Bitcoin typically surges. BTC has been stable between $50K and $70K since April, even as gold and silver prices continue to rise. With a notable $2 billion recently invested in Bitcoin ETFs, many are optimistic that BTC may break its all-time high after the US elections,” said influencer Mario Nawfal in a post on X (formerly Twitter).

Furthermore, the research indicates that millennials comprise the majority of the crypto ETF investment demographic, with over 62% of investors falling into this age group, while Baby Boomers have shown considerably less interest.

ETF inflows are now viewed as a vital market indicator for cryptocurrencies, often reflecting shifts in market dynamics. Recent fluctuations in ETF inflows and outflows have been closely tied to price changes in the market.

Read More: How to Invest in Ethereum ETFs?

In contrast, Ethereum ETFs have experienced lower demand, with outflows nearing $103.1 million over recent months. Notably, Ethereum ETFs have reported negative net flows in 8 out of the past 11 weeks.