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There’s no denying crypto’s appeal has skyrocketed since the days of Ethereum miners and PC gamers feuding over graphics processing units. We know that’s deep, tech-nerd territory, but the point is that crypto used to be niche, and now it’s far from fringe.
That shift became especially clear last year when the first spot crypto ETFs debuted, signaling broader acceptance of digital assets in mainstream financial markets. The momentum continued in this year, with US-based crypto ETFs pulling in roughly $42 billion in inflows, according to Morningstar Direct. Still, investor enthusiasm hasn’t necessarily translated into strong performance. That’s because crypto is fundamentally different from something like gold, where macroeconomic forces tend to provide clearer signals for price movement, said Dan Sotiroff, senior analyst at Morningstar.
“It goes back to one of the selling points of Bitcoin and crypto in general, which is that it’s on this decentralized exchange and it’s very difficult to figure out who the exact owners are and why they’re buying or selling on any given day,” Sotiroff told ETF Upside. “It’s a little bit of a mystery.”
BlackRock’s iShares Bitcoin Trust ETF (IBIT) has taken in more than $25 billion in flows in 2025 alone and now holds about $66 billion in net assets. IBIT is the fastest-growing ETF in history and ranks among the top funds by inflows this year. Yet despite that popularity, the ETF is down just over 6.4% through Dec. 21, according to Morningstar Direct. IBIT isn’t an outlier, either. Several other widely held crypto ETFs are also in the red:
That kind of drawdown isn’t a surprise, though, and likely won’t slow momentum, said James Seyffart, senior research analyst at Bloomberg Intelligence. “People are allocating to these things for the long term,” he told ETF Upside, adding that his firm expects more than 100 crypto-based ETFs to launch next year. “If you’re investing in this space, you understand exactly how volatile it is and how poor performance can be.”
