The past year has been transformative for bitcoin (BTC-USD) and the broader cryptocurrency market, signalling a shift toward institutional adoption.
Among the most notable milestones were the January launch of US-based spot bitcoin exchange-traded funds (ETFs), the subsequent introduction of options on these ETFs, and bitcoin’s remarkable surge past the $100,000 (£78,600) mark in December. This crescendo comes as anticipation builds for a potentially crypto-friendly US administration under president-elect Donald Trump, set to be inaugurated early next year.
The launch of spot bitcoin ETFs on 10 January catalysed an early-year rally, with bitcoin climbing from the upper $30,000s to nearly $48,000.
“The volumes were terrific coming out of the gate,” Grant said. This milestone gave institutional investors access to a regulated spot bitcoin ETF, creating a foundation for new market activities, including trading against regulated futures products and incorporating bitcoin as a portfolio optimisation tool.
Spot bitcoin ETFs function similarly to traditional ETFs but with a distinct focus on tracking the current price of bitcoin. These financial products directly invest in bitcoin as the underlying asset, unlike derivatives-based bitcoin ETFs, that use financial instruments like futures contracts to replicate bitcoin’s prices. This distinction allows investors in spot bitcoin ETFs to have direct exposure to the price movements of bitcoin itself.
