The Global X 21Shares Bitcoin ETF (EBTC) was named the top-performing exchange-traded fund (ETF) last year thanks to a 146 per cent growth in flows, according to Global X’s Australian ETF Landscape H2 2024 report.
More than $330 million flowed into the broader Australian cryptocurrency ETF market in 2024, accounting for 1 per cent of total ETF flows. Meanwhile, US cryptocurrency ETFs enjoyed over US$40 billion ($63 billion) in ETF flows, representing 3–4 per cent of total ETF flows.
Jocum, senior product and investment strategist at Global X, said cryptocurrencies thrived in a risk-on environment fuelled by President Donald Trump’s pro-cryptocurrency policies.
“ETFs have made crypto investing more accessible, particularly for people reluctant to invest through crypto exchanges,” he said.
Jocum expects cryptocurrency ETFs to undergo major innovation in the next two years, with the US leading and Australia playing a key role by 2025.
“We expect significant innovation in the crypto ETF space over the next one to two years. With the US leading the charge, boosted by Trump’s pro-crypto stance, we could see a wave of new crypto ETFs in 2025, with Australia, being an early pioneer in crypto ETFs, potentially playing a key role,” he said.
Last month, he told InvestorDaily the Australian bitcoin ETF market alone could exceed $1 billion in one to two years, fuelled by price growth and institutional momentum.
Betashares debuted its bitcoin and Ethereum ETFs on the ASX in February, taking Australia’s cryptocurrency ETF market to five bitcoin ETFs and three Ethereum ETFs.
While the space is relatively small compared to global counterparts, inflows have been surging, with growing institutional interest.
Speaking to InvestorDaily in February, VanEck revealed that as financial advisers enter the space, institutional investors are also showing growing interest in its cryptocurrency ETFs, particularly due to their ASX listing.
“The ability to get bitcoin exposure on the ASX was certainly a turning point, providing investors with access from a trusted provider and the comfort of secure, institutional-grade protection,” said Jamie Hannah, VanEck’s deputy head of investments and capital markets.
A Reuters report last week revealed that over in the US, asset managers, including wealth firms, hedge funds and pension funds, increased allocations significantly to bitcoin ETFs in Q4 2024. Among those highlighted was Mubadala, which took an 8.2 million share stake in the iShares ETF that’s worth US$436.9 million, and the State of Wisconsin Investment Board, which more than doubled its bitcoin ETF holdings to 6 million shares by 31 December.
International equities go from strength to strength
Global X’s latest report also highlighted global equity ETFs as the top performers of 2024, attracting over $16 billion in net flows.
This accounted for nearly half of the total $31 billion in net flows for the overall ETF market.
US equities led the way and attracted a record $5 billion in net flows, with the senior product and investment strategist expecting this trend to continue into 2025.
“Investors were keen to get exposure to the US market, especially after US equities experienced their best two-year run in a quarter of a century. This momentum could extend into 2025, driven by US exceptionalism and the prospect of stronger earnings growth broadening across sectors beyond technology companies under a pro-markets Trump presidency,” Jocum said.
Some 65 new ETF products were launched for Australian investors last year, which broke the previous record of 55 set in 2023.
A recent outlook from State Street predicted that at least three global asset managers, with FUM of US$100 billion ($157 billion), will enter the local ETF market sometime this year. It also expects the cryptocurrency market will expand by at least one new coin.
