Introduction
Previously we told you about Bitcoin ETFs: the instrument was legalized only recently, in 2024, but is already a reserve part of the crypto market. Bitcoin ETFs are attracting increasing attention to institutional economic investors and are of interest to more and more people. In this article, we will take a closer look at the main issues surrounding Bitcoin ETFs, examine the main areas of players and their influence.
What is an ETF and what is a Bitcoin ETF?
An exchange-traded fund (ETF) is a type of investment fund that trades on stock exchanges, similar to stocks. An ETF contains assets such as stocks, commodities, or bonds, and typically operates with an arbitrage mechanism designed to keep trading close to the net asset value.
Bitcoin ETFs allow investors to buy BTC in the form of fund shares without having to have a cryptocurrency wallet, store private keys, or use exchanges.
Because ETFs exist within the traditional financial system, Bitcoin ETFs open the door to a wider range of investors, including those who prefer traditional investment mechanisms.
However, it is important to note that holders of Bitcoin ETF shares do not actually own the underlying Bitcoin.
The road to Bitcoin ETF approval in the United States has been long and full of obstacles. The first application for Bitcoin ETFs was filed in 2013, but legalization didn’t happen until 2024. The U.S. Securities and Exchange Commission (SEC), which is responsible for approving ETFs, has been cautious, citing concerns about market volatility, liquidity, and potential market manipulation.
Leading the way in launching Bitcoin ETFs has been Canada: the Ontario Securities Commission approved the Purpose Bitcoin ETF in February 2021, making it the first North American Bitcoin ETF.
How Bitcoin ETF Changed the Market
Immediately after the launch, major players including BlackRock (IBIT), Fidelity (FBTC) and Ark Invest attracted billions of dollars.
According to Bloomberg and CoinShares:
- In the first 3 months, the inflow of funds into spot BTC ETFs exceeded $12 billion;
- Total assets under management reached $55+ billion by May 2025;
- BlackRock’s IBIT became the largest crypto fund in history with an AUM of over $17 billion.
Currently, the following aspects are also considered key changes in the market.
1. Increased legitimacy and trust
The launch of the ETF meant that the US regulator, the SEC, recognized BTC as an investment asset. This dramatically reduced reputational risks for large investors and led to increased transparency and reduced risks for investors. However, regulatory issues remain relevant, especially with regard to other cryptocurrencies.
2. Decrease in volatility
The introduction of institutional capital into the game has increased the depth of the market and reduced the amplitude of price fluctuations. For example, BTC volatility in Q1 2025 was the lowest in the last 6 years.
In addition, the active use of algorithmic strategies (for example, arbitrage and basket trading) has made the market more mature.
3. Increased turnover and liquidity
With the advent of ETFs, Bitcoin became available through the largest US brokers – from Charles Schwab to Fidelity Investments. This has dramatically expanded the audience and increased the liquidity of the asset.
Comparison of assets under management
With multiple ETFs launching simultaneously, two financial giants, BlackRock and Fidelity, are in a heated competition for market leadership.
BlackRock and Fidelity represent different schools of investment: the former is the epitome of global institutional capital, while the latter is a pioneer in digital assets, working with cryptocurrencies since 2014. Both companies launched their spot Bitcoin ETFs at the same time after SEC approval, but their strategies and target audiences are different.
Who is ahead in assets?
As of May 2025:
- IBIT (BlackRock) Reaches $17.3 Billion in Assets Under Management
- FBTC (Fidelity) Holds $11.9 Billion
BlackRock maintains its leading position in terms of investment volume. However, it is worth noting that Fidelity’s growth rates are more stable, and there are virtually no outflows, unlike its competitor’s short-term fluctuations.
According to Bloomberg, in the first 90 days after launch:
- IBIT raised $5.3 billion
- FBTC raised $4.6 billion — with less marketing costs, but due to a strong client base
Strategy and Positioning
BlackRock (IBIT)
- Target: Institutional Clients (Pension Funds, Banks)
- Custodian: Coinbase Custody
- Fees: 0.25% (reduced at launch)
- Platform: NASDAQ
BlackRock actively uses ETFs as a tool to include Bitcoin in the model portfolios of its clients around the world.
Fidelity (FBTC)
- Target: Retail investors and HNWI (high-net-worth individuals)
- Custodian: Fidelity Digital Assets
- Fees: 0.39%
- Platform: Cboe BZX
Fidelity has an infrastructure advantage: it has been developing a crypto division since 2018 and offers users its own BTC storage, API access, and direct trading within the platform.
When Ethereum ETF Will Catch Up With BTC
Ethereum ETFs were approved in the US in the summer of 2024. As of May 2025:
- Ethereum ETF AUM is about $5.8 billion
- Leaders: Fidelity, Ark, Bitwise
According to JPMorgan and Bernstein:
- Ethereum ETF will catch up with BTC ETF in growth rates by 2026
- ETH will become the asset of choice for institutions seeking exposure to DeFi and Web3
Conclusion
At the moment, BlackRock and Fidelity are on equal terms, actively competing for leadership in the Bitcoin ETF market. However, their success depends on the further development of the cryptocurrency market and regulation.