Amid a general decline in retail investor activity in Bitcoin, assets managed through ETFs are on the rise. This article examines the current market situation and the factors driving these changes.
Who is Buying Bitcoin ETFs?
Since the launch of Bitcoin ETFs in the US in January 2024, Bitcoin has entered the portfolios of clients who may never have held it directly. The primary ETF holders are investment advisers and hedge funds managing assets for both retail and corporate clients. Collectively, ETF shareholders own approximately $135 billion in Bitcoin.
ETFs as a Tool for Retail Investors
Despite the assumption that retail interest in Bitcoin has waned, their participation is actively expressed through ETFs. As André Dragosch, head of research at Bitwise, pointed out, "Retail has been the major distributor of Bitcoin in 2025 so far. It is important to understand that retail participation is heavily expressed via ETFs, with about 75% of US Bitcoin ETF investors being retail clients."
Why Can't Bitcoin Reach New Heights?
Despite the rise in demand for Bitcoin through ETFs, its price remains under pressure. According to CryptoQuant, current inflows are not sufficient to offset ongoing outflows. A significant catalyst, such as interest rate cuts, might be necessary to reignite demand, though interest in holding Bitcoin may continue in countries like Nigeria or Argentina.
The situation in the Bitcoin market demonstrates changes in the role of retail investors, who may now prefer investments through traditional financial mechanisms. Direct demand may be temporarily diminished, but it has not completely disappeared.
