US and Canada Bitcoin ETFs: Biggest buyer vs worst loser

From cointelegraph by Helen Partz

The US emerged as the biggest investor in spot Bitcoin exchange-traded funds (ETFs) in 2024, while Canada — the first country to launch a spot Bitcoin ETF — was among the major losers.

US spot Bitcoin  BTC$94,922  ETFs  accounted for 100% of $44.2 billion  crypto exchange-traded product (ETP) inflows in 2024, making the US the world’s largest holder of Bitcoin ETFs in terms of assets under management (AUM).

Switzerland, the second largest buyer of crypto ETPs in 2024, only saw $630 million in inflows — a whopping 98% gap compared to the US.

Meanwhile, Canada, which launched the first physically-settled Bitcoin ETF in 2021, saw record crypto ETP outflows of $707 million in 2024, reflecting a shift to more liquid US alternatives.

Why does the US lead the world in Bitcoin ETFs?

The success of US Bitcoin ETFs comes just one year after the US Securities and Exchange Commission made a  historic decision to approve  spot BTC ETFs in January 2024.

The US dominance in Bitcoin ETFs is no surprise, given its position as the largest ETF market globally.

US equities dominate the value of global stocks in 2024. Source: Reuters

“The US is by far the largest ETF market. The global ETF market is about $15 trillion; the US accounts for $10.5 trillion of that. It’s natural that we would be the largest,” Matt Hougan, chief investment officer at Bitwise, told Cointelegraph.

The US is the birthplace of ETFs and represents more than 70% of global ETF AUM, 21Shares’ crypto research strategist Matt Mena told Cointelegraph, adding:

“With decades of investor familiarity and trust in the ETF structure, the US has naturally become the dominant market for these products.”

The US is also the largest capital market globally, with the US stock market alone accounting for over 60% of the total global stock market capitalization, Mena added.

“US investors have historically been more adventurous and open to risk opportunities, particularly in the technology space; it, therefore, comes as no surprise that their Bitcoin ETFs would become leaders in terms of AUM,” CoinShares head of research, James Butterfill, said.

Canada crypto ETFs: $4.2 billion inflows in 2021 vs. $707 million outflows in 2024

Canada saw the largest-ever outflows from its crypto ETPs in 2024, totaling $707 million,  according  to data from CoinShares.

Canada’s 2024 crypto ETF outflows surpassed its previous record outflows of $151 million in 2022.

Canadian crypto ETF outflows in 2024. Source: Bloomberg

The Canadian investment firm Purpose Investments launched its Purpose Bitcoin ETF in February 2021, making Canada the first country in the world to debut spot Bitcoin ETFs.

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The world’s first spot Bitcoin ETF saw an  explosive debut with $564 million  in AUM in just five days after the trading launch. Following the launch, Canadian crypto ETPs netted $4.2 billion in inflows in their first year of trading.

Canadian crypto ETF investors switch to US-based options

Canada experienced the largest Bitcoin ETF outflows in 2024, primarily due to a shift in investor behavior following the launch of US spot Bitcoin ETFs, 21Shares’ Mena said.

The shift was a result of US Bitcoin ETFs offering greater liquidity, broader investor participation and institutional support.

“In essence, these Canadian ETFs benefited from a regulatory arbitrage over the US, where such products were unavailable,” he noted, adding:

“Once spot Bitcoin ETFs began trading in the US, a significant number of non-Canadian domiciled investors swiftly pulled their funds from the Canadian ETFs and moved into the US-domiciled products.”

The shift led to Canada’s crypto ETFs becoming the only ETFs category in the country to see outflows in 2024,  according  to Bloomberg.

With US Bitcoin ETFs dominating the global crypto ETF industry, it’s unlikely that another market would once eclipse US AUM for Bitcoin products, CoinShares’ Butterfill suggested.

“At the moment, though, European issuers such as ourselves have a much more diverse set of ETPs and more efficient settlement processes for crypto ETFs, offering staking yields in ETP for being a good example,” he said.