Bitcoin ETFs: Better year or sophomore slump?
Fidelity has had “productive conversations” across all client segments when it comes to rising bitcoin ETF usage in 2025
Ivan Popovych/Shutterstock modified by Blockworks
This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.
After hitting the one-year anniversary of US spot bitcoin ETFs launching, Bloomberg Intelligence’s James Seyffart told me that even the more bullish firms behind these products were surprised by the reception.
Matt Horne, Fidelity Investments’ head of digital asset strategists, confirmed to me as much.
He referenced demand exceeding the company’s “optimistic” expectations across retail investors, advisers and institutions. The Fidelity Wise Origin Bitcoin Fund (FBTC) — with $12.2 billion of net inflows — trails only BlackRock’s iShares Bitcoin Trust (IBIT) in that category ($37.7 billion).
But is the bitcoin ETF market due for a sophomore slump?
Fidelity has so far had “productive conversations” across all client segments when it comes to rising bitcoin ETF usage in 2025, Horne explained.
He also said about the 16-year-old asset: “A longer history will allow for continued portfolio research and a stronger understanding of investors’ risk tolerance and bitcoin’s role in a portfolio.”
Horne mentioned the “adoption spectrum” of various client types. Related, Bitwise CEO Hunter Horsley said during an X space Friday — using terms from Geoffrey Moore’s “Crossing the Chasm” — that we’re stepping out of the early adopter phase and into the “early majority.”
Then, borrowing Winston Churchill’s words to describe bitcoin ETF adoption, Horsley added it feels like we’re at “the end of the beginning.” Exploring bitcoin as an opportunity remains “on the to-do lists” across firms within the $30 trillion US wealth management sector, he noted.
But as Zacks Investment Research’s Neena Mishra told me Friday, whether BTC ETF inflows in 2025 can match/beat last year is likely to hinge on performance.
US bitcoin funds suffered outflows of $569 million and $149 million on Wednesday and Friday, respectively, (markets were closed Thursday to honor Jimmy Carter) amid the BTC price plunge mentioned earlier.
Casey brought up the possible US strategic bitcoin reserve — something Seyffart said would drive ETF demand. But a BTC pullback (and outflows) could come if Trump and the pro-crypto Congress fail to execute on crypto-related promises.
“Though as more traditional investors use these ETFs, they will likely be a support on bitcoin’s price as they rebalance in downtrends by buying more,” Seyffart said. “Conversely, they will also likely be sellers in uptrends as they rebalance to their target allocation levels over the longer term.”
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
