Crypto ETFs on Growth Path: Institutional Inflows Could Exceed $300 Billion by 2026

Record Growth in Bitcoin ETFs Continues

Since the approval of the first spot Bitcoin ETFs in January 2024, the cryptocurrency market has undergone a fundamental transformation. The assets under management for all Bitcoin index funds have reached over $120 billion USD ^[1]. BlackRock's IBIT Bitcoin Trust is already considered the most successful index fund in stock exchange history and represents the most lucrative financial product in the sponsor's portfolio ^[1].

Industry experts forecast that institutional inflows into crypto ETFs could rise to over $300 billion USD by 2026 ^[1]. This development enables institutional investors for the first time to invest in Bitcoin in a regulated manner through established financial instruments.

BitMine Dominates Ethereum Treasury Market

While Bitcoin ETFs continue to grow, a new trend is emerging in the Ethereum segment. BitMine has further expanded its Ethereum holdings through a $119 million purchase and now holds 3.73 million ETH tokens valued at $11.38 billion ^[2]. This represents 3.08 percent of the total ETH supply ^[2].

With this strategy, BitMine is pursuing its "Alchemy of 5%" plan and has already achieved 61 percent of its goal to hold 5 percent of the entire Ethereum supply ^[2]. With cash reserves of approximately $882 million, the company has sufficient capital for further purchases ^[2].

Ethereum ETFs Struggle with Outflows

In contrast to Bitcoin products, US spot Ethereum ETFs currently show weaker performance. The investment products recorded outflows exceeding $110 million at the end of the trading week ^[2]. Investors withdrew $41.5 million on December 4, followed by an additional $75.2 million in the subsequent trading session ^[2].

This development continues a negative trend from the previous week, in which the funds experienced outflows on four of five days. Only on Wednesday did the products receive inflows of $140.2 million ^[2].

Market Activity in ETH Treasury Segment Declining

Activity in the ETH treasury market has declined significantly over the past three months. ETH acquisitions have fallen 81 percent from 1.97 million ETH in August to 370,000 ETH in November ^[2]. BitMine acquired the majority of purchased Ethereum tokens during this period, purchasing 679,000 ETH worth $2.13 billion in the past month alone ^[2].

Outlook and Market Dynamics

The ETF boom has already had noticeable effects on Bitcoin supply and market structure ^[1]. While Bitcoin products continue to see strong institutional demand, developments in Ethereum ETFs remain more volatile. The introduction of new staking ETFs could, however, create additional opportunities for institutional investors ^[1].

According to BlackRock CEO Larry Fink, sovereign wealth funds have already used price weakness as an entry point ^[2], indicating growing interest from traditional institutional investors in cryptocurrencies. Further developments will largely depend on whether this trend continues and how regulatory frameworks evolve.