As the cryptocurrency landscape evolves, the dynamics of Bitcoin exchange-traded funds (ETFs) in the U.S. and Canada have taken a significant turn. In 2024, Canadian investors are migrating towards more liquid alternatives in the U.S., resulting in the largest outflows of cryptocurrency exchange-traded funds in Canadian history.

a changing landscape

in 2024, the United States has firmly established itself as the global leader in Bitcoin spot ETFs, while Canada, a pioneer in launching physically settled Bitcoin ETFs, has faced unprecedented losses. U.S. Bitcoin spot ETFs accounted for 100% of the $44.2 billion in net inflows to cryptocurrency exchange-traded products (ETPs), consolidating the U.S. position as the largest holder of Bitcoin ETFs by assets under management (AUM). In stark contrast, Canada experienced $707 million in net outflows, reflecting a notable shift towards U.S. options.

why the united states leads in bitcoin ETFs

the rise of Bitcoin spot ETFs in the United States has been a major achievement. Bitcoin ETFs can be attributed to the historic decision by the SEC to approve these products in January 2024. This crucial moment reinforced the dominance of the United States within the global ETF market, which represents over 70% of total assets under management globally.

Matt Hougan, chief investment officer at Bitwise, highlights this dominance:

"The United States is by far the largest ETF market. The global ETF market totals about $15 trillion, and the United States represents $10.5 trillion of that figure."

James Butterfill, head of research at CoinShares, adds:

"Historically, U.S. investors have been more receptive to risk opportunities, especially in the technology sector, which explains the dominance of Bitcoin ETFs in terms of assets under management."

Canada: from record inflows to historic outflows

Canada made headlines in 2021 by launching the world's first spot Bitcoin ETF, raising an impressive $4.2 billion in its first year. However, in 2024, it faced record outflows totaling $707 million, surpassing its previous high of $151 million in 2022. Matt Mena, strategist at 21Shares, explains that investors are shifting towards U.S. ETFs due to their higher liquidity and institutional support:

"Canadian ETFs benefited from a regulatory gap in the U.S. Once Bitcoin spot ETFs were approved in the U.S., investors quickly moved their funds."

Outlook for the global market

While U.S. Bitcoin ETFs dominate with substantial inflows, it remains unlikely that any other market will match their AUM levels. However, Butterfill notes that European issuers are offering a more diverse range of products, including cryptocurrency ETFs with staking returns.

Source: https://www.startupxstp.com/blog/news-2/bitcoin-etfs-in-the-u-s-and-canada-the-shift-from-top-buyer-to-biggest-loser-18