Since spot Bitcoin ETFs were launched in the US in early 2024, they have attracted tens of billions of dollars of inflows, and this institutional demand was the primary driving force for BTC’s rally over the last 12 or so months.
Ether ETFs were also approved by the SEC last year, but their inflows have been relatively limited thus far.
Market experts believe that spot Bitcoin ETFs will continue to be the most popular crypto products available to institutional investors, though other crypto ETFs – including funds made up of a basket of cryptos – are likely to attract significant inflows as the market matures.
Speaking to Crypto Intelligence News, Adrian Fritz, Head of Research at 21Shares, explained that Bitcoin has proven more popular due to its value proposition being more clearly defined, but predicted that demand for non-Bitcoin ETFs is likely to increase.
“This cycle has clearly been centered around Bitcoin. As the most established crypto asset, it is widely seen as the safest choice, with a straightforward value proposition as digital gold, a well-defined regulatory status as a commodity, and strong institutional trust,” Fritz said.
“Naturally, investors—especially institutions—feel more comfortable allocating to BTC over other crypto assets.
“While this trend may persist in the short term, we expect demand for non-Bitcoin products to grow over time.
“As investors become more familiar with the broader crypto ecosystem, they will start exploring opportunities beyond Bitcoin, leading to increased traction and momentum for diversified offerings.”
Roxanna Islam, Head of Sector and Industry Research at VettaFi, echoed this sentiment and noted that Bitcoin is also dominating institutional demand for crypto products outside the US market.
“Bitcoin overall has significantly more demand than other cryptocurrencies–it holds approximately 60% of market share,” Islam told Crypto Intelligence News.
“When packaged into spot ETFs, that dominance is even higher due to retail preference for Bitcoin. While I think there will be demand for other spot crypto ETFs, it will still remain relatively lower than Bitcoin.
“This is similar to markets outside the U.S. where large suites of crypto ETPs are offered, yet Bitcoin ETPs are significantly more popular.”
Islam added that she believes multi-token crypto ETFs “will play a large role in helping investors diversify their crypto holdings, but spot Bitcoin ETFs will likely still dominate in terms of popularity since any mainstream retail investors are satisfied with using just Bitcoin as a crypto play.”
Fritz noted that although Bitcoin ETFs are likely to remain dominant, exchange traded funds made up of numerous cryptocurrencies could eventually become more popular, as seen in the stock market.
“As long as it serves as the primary entry point for institutional investors, single-asset BTC products will likely maintain higher demand in the near term.
“However, as the crypto market matures, investor preferences may shift toward diversified exposure to altcoins beyond Bitcoin—much like in traditional finance, where index funds and sector ETFs are often preferred over single-stock investments.”
With regards to new crypto-based ETF filings, Islam noted that we are already seeing new, non-spot crypto products being developed.
“Filings for new crypto ETFs have extended beyond spot products and are following broader ETF trends including leveraged and buffered ETFs.
“It is likely that these trends will continue to align with the broader ETF market as the crypto ETF ecosystem grows more complex,” she concluded.
