Two Years of Bitcoin ETFs: From Icebreaking to Confluence in the Financialization Journey

In January 2024, spot Bitcoin ETFs were officially approved.

For the crypto industry, this was a milestone moment over a decade in the making, instantly capturing the global financial market's focus upon the news.

Two years have passed in the blink of an eye, and spot Bitcoin ETFs are no longer a novel topic. A set of solid data is quietly reshaping the market's understanding of the boundaries of this asset class.

As of now, the total Assets Under Management (AUM) for Bitcoin ETFs has climbed to $124.85 billion. The concentration at the top is extremely pronounced: the five leading products—IBIT ($74.11 billion), GBTC ($16.4 billion), FBTC ($18.89 billion), ARKB ($5.81 billion), and BITB ($5.35 billion)—collectively manage $120.56 billion in assets, accounting for 96.6% of the total market, clearly outlining an institution-dominated market structure.

The trading activity has also exceeded expectations. According to data from The Block, the cumulative trading volume of U.S. spot cryptocurrency ETFs officially surpassed $2 trillion on January 2nd. Looking back at this progression: it took a full 16 months to first reach $1 trillion on May 6, 2025; whereas the jump from $1 trillion to $2 trillion took only 8 months, doubling the growth rate. Among them, BlackRock's IBIT remains firmly in the top spot, accounting for a staggering 70% of the trading volume.

The divergence in fund flows is also very clear. In 2025, U.S. spot Bitcoin ETFs captured the majority of net inflows in the cryptocurrency ETF market, significantly outperforming Ethereum ETFs and further solidifying Bitcoin's dominant position in the crypto ETF space.

If the approval of Bitcoin ETFs symbolized Bitcoin officially knocking on the door of the mainstream financial system, then today's data proves it has become a structurally significant allocation asset within institutional portfolios. Behind these numbers lies not just a leap in scale, but also institutional-level recognition: Bitcoin is integrating into the regular operational framework of the global financial system at an unprecedented pace.

The History of Bitcoin ETFs: A Breakthrough Far from Accidental

The launch of spot Bitcoin ETFs was not a sudden act of regulatory goodwill, but the result of a long-term game.

Prior to 2024, the core regulatory concerns surrounding Bitcoin ETF applications and rejections consistently focused on three points: whether the underlying market was mature enough and could effectively prevent manipulation; whether the asset custody, clearing, and audit mechanisms were reliable; and whether the investor protection framework was adequate. These issues were not about judging Bitcoin's intrinsic value, but were institutional thresholds any asset must cross to be incorporated into the formal financial product system.

Tracing the timeline, the demand for Bitcoin ETFs can be traced back to 2013. As Bitcoin prices began entering the public eye, some investors and brokers realized it was difficult for ordinary investors to access this emerging asset within a compliant framework, leading to the earliest conceptions of a Bitcoin ETF. However, for many years thereafter, the U.S. Securities and Exchange Commission (SEC) consistently rejected related proposals, citing recurring concerns over market manipulation risks, custody security, and information transparency.

It wasn't until October 2021 that the SEC first relented, approving the ProShares Bitcoin Strategy ETF (BITO), a Bitcoin-related ETF product. However, this product was tied to futures contracts, not a true spot ETF, and was more akin to a regulatory test.

The real turning point occurred on January 10, 2024. The SEC approved 10 spot Bitcoin ETFs in one go, including those from BlackRock, Fidelity, Grayscale, Ark Invest, and Invesco. This decision marked the official entry of U.S. crypto asset investment into the spot ETF era and became the most significant institutional bridge between the traditional financial system and crypto assets.

This moment did not arrive by accident. By 2024, the surrounding infrastructure for Bitcoin, including trading systems, custody mechanisms, compliance frameworks, and information disclosure standards, had developed to a stage acceptable to regulators. The emergence of ETFs essentially represented the financial system's recognition and response to this market maturity.

From a longer-term perspective, this is by no means the endpoint of Bitcoin's financialization, but a clearly visible, formally acknowledged milestone in its financialization journey.

Surpassing Gold: Bitcoin ETFs Hit the "Fast-Forward" Button

In 2004, the SPDR Gold Trust ETF (GLD) was approved, becoming the first-ever spot gold ETF. At that time, the global market capitalization of gold was approximately $1 to $2 trillion. Subsequently, driven by ETFs and related financial instruments, gold's financialization process accelerated. By 2025, the global AUM of gold ETFs had climbed to $559 billion, and the average daily trading volume of the gold market reached about $361 billion, both setting new historical highs.

With this history as a precedent, when spot Bitcoin ETFs were approved in 2024, many market participants naturally drew comparisons. A similar question lingered: Could ETFs once again play the role of a "catalyst," injecting unprecedented liquidity and vitality into the Bitcoin market?

Now, two years later, Bitcoin ETFs have provided a clear answer.

According to Chainalysis data, the pace of capital flows into Bitcoin ETFs has already surpassed the early-stage inflow speed of the first net gold ETF launched in 2005 (adjusted for inflation).

Following the launch of spot gold ETFs, not only did their own scale rise rapidly, but they also spurred activity across the entire gold ecosystem: trading volumes in spot, futures, options, and various derivative markets achieved order-of-magnitude growth in the subsequent years.

This history provides a vivid reference for understanding the potential impact of Bitcoin ETFs. It confirms that ETFs, as a financial medium, inherently possess a certain "leverage effect," capable of rapidly enhancing an asset's liquidity and attracting broader market participation.

Therefore, Bitcoin ETFs are not simply retracing gold's old path. They have demonstrated faster market adoption and garnered a more enthusiastic capital response in a shorter timeframe.

The Significance of ETFs: An Accelerator for Financialization

Looking at the two-year development, spot Bitcoin ETFs have propelled Bitcoin's financialization process on multiple fronts.

First, the participation method has been institutionalized.

Spot Bitcoin ETFs provide investors with a regulated, standardized participation path, significantly lowering technical and operational barriers. Investors can gain exposure to Bitcoin's price movements without directly holding, storing, or managing it, making Bitcoin investment more aligned with mainstream financial market practices.

Second, the investment process has been greatly simplified.

Investors can buy and sell Bitcoin ETF shares like stocks or other ETFs, using market or limit orders, enhancing both convenience and security. This makes it easier to incorporate Bitcoin into conventional portfolio systems.

Third, mainstream acceptance of Bitcoin as an asset class continues to rise.

Spot Bitcoin ETFs have significantly boosted market recognition of Bitcoin as a distinct asset class, gradually moving it from within the crypto market into the mainstream asset allocation and wealth management discussion framework, and beginning to appear in some long-term investment and retirement planning scenarios.

Fourth, institutional capital and global market participation have been systematically unlocked.

The involvement of global top-tier asset managers like BlackRock and Fidelity has transformed Bitcoin ETFs from symbolic compliance products into a crucial gateway for institutional capital entering the crypto market. Simultaneously, the sequential advancement of spot Bitcoin ETFs in markets like the U.S. and Hong Kong indicates this financialization process is showing a trend of global diffusion.

Structural Challenges and Diversified Participation Paths Amid Accelerated Financialization

The rapid development of Bitcoin ETFs has significantly accelerated Bitcoin's financialization but has simultaneously amplified some long-standing structural challenges.

First, from a market perspective, spot Bitcoin ETFs remain directly exposed to Bitcoin's inherent high volatility, with rapid price changes leading to short-term valuation fluctuations. Additionally, ETF management fees and operational costs can impact long-term investment return structures.

More importantly, the high degree of financialization represented by ETFs is a double-edged sword. On one hand, it significantly amplifies Bitcoin's market liquidity and participation scale. On the other hand, it can easily shift market focus more towards the price performance of the financial product layer, potentially overlooking the fact that the Bitcoin network itself still requires continuous investment in computing power and infrastructure to maintain its long-term security and stability.

From an investor's perspective, ways to participate in Bitcoin are not limited to price-level trading and holding. Beyond seeking price returns through spot holdings, spot ETFs, or trading strategies, cloud mining offers another perspective: participating in Bitcoin via a path of locked-in costs and stable output.

Through cloud mining, investors can lock in hashrate and costs upfront, receiving relatively stable Bitcoin output over a certain period. This model essentially equates to locking in the future acquisition cost of Bitcoin for a period, allowing investors to establish a more controllable cost structure and return expectation in a highly volatile market. It also offers another potential path to outperform the spot price over a cycle.

Simultaneously, this approach allows individual capital to continue participating in the Bitcoin network's hashrate system, rather than remaining solely at the price-level financial transaction layer. Cloud mining is both a method of acquiring Bitcoin and a form of ongoing support for network infrastructure. Against the backdrop of deepening financialization, it preserves a richer, more diverse participation structure for the market.

As Bitcoin continues integrating into the global financial system, participation methods at different levels and in various forms will collectively form the important foundation for its long-term operation and development.

Conclusion

Two years is enough for a new financial product to undergo a complete market test. The journey of spot Bitcoin ETFs clearly tells us: the speed at which Bitcoin is entering the mainstream financial track is far faster than most initially imagined.

But this is clearly not the end. ETFs are more like a lit beacon, making Bitcoin's financialization path clearer from a blur and signaling that more institutionalized forms will emerge ahead.

In the future, Bitcoin will continue evolving between financial markets, technological systems, and infrastructure. Different forms of participation will collectively shape its long-term position within the global financial system.

Two years is just the prologue. This journey continues to unfold, and the truly noteworthy new chapters may have just begun.