Increased Demand for Bitcoin ETFs and Potential Rise in Institutional Funds Outside the U.S.

The rise of Bitcoin (BTC) has drawn attention to the accessibility of institutional funds and spot ETFs outside the United States. While spot Bitcoin ETFs have established themselves as a channel for institutional demand in the U.S., they remain limited in some markets, including South Korea. On the 27th, Joo Ki-young, founder of CryptoQuant, stated on X that "the peak of this bull market is likely to be driven by institutional funds and ETFs outside the U.S." He explained that there are no spot Bitcoin ETFs in South Korea, and the ability for individuals to purchase overseas ETFs and for companies to open accounts for direct BTC holdings is restricted. The U.S. Securities and Exchange Commission (SEC) approved the listing and trading of spot Bitcoin ETPs on January 10, 2024, which is limited to non-security products like Bitcoin. The South Korean Financial Services Commission has indicated that issuing spot Bitcoin ETFs or mediating overseas ETFs may violate capital market laws. As a result, it is challenging for domestic investors to utilize U.S.-style spot ETFs. Fund flows continue to concentrate on U.S. ETFs, with a net inflow of $242.3 million recorded for U.S. spot Bitcoin ETFs on the 27th, but a reversal to a net outflow of $20.9 million occurred on the 28th. Joo mentioned stablecoin liquidity and the infrastructure for tokenized real-world assets (RWA) as conditions for the next stage. According to RWA.xyz, the total asset value of global tokenized assets is estimated at $38.69 billion, while the total value of stablecoins is $303.04 billion. However, these figures do not directly correlate with BTC demand. Currently, the flow is centered around U.S. ETF supply and demand, and the timeline for the introduction of spot Bitcoin ETFs in South Korea has not been officially presented.

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