Bitcoin's Volatile Year: Record Highs, Safe Haven Flows, and ETF Inflows
The digital asset market has witnessed significant developments and volatility over the past year. Bitcoin, the world's largest cryptocurrency, has set record highs and experienced turbulent periods, while exchange-traded funds (ETFs) have seen substantial inflows and outflows.
Bitcoin's price closed lower last week, nearing a two-month low, as risk assets tumbled following a hotter-than-expected US jobs report. The US Department of Justice's approval of the sale of $6.5bn BTC added to the risk-off mood. However, BTC had been on an upward trajectory, setting consecutive record highs in 2024, with underlying spot market volumes reaching their highest levels since 2021.
During the crisis in Korea, Bitcoin saw significant safe haven flows. The BTC-KRW's cumulative volume delta (CVD) on Upbit and Bithumb remained positive since early December, indicating increased demand for the cryptocurrency during the turmoil.
In the twelve months since the approval of spot BTC ETFs in the United States, a lot has happened in the digital asset market. The top three BTC ETFs by assets under management (AUM) regularly outperform major US exchanges in volume, but not the major global exchange Binance. BTC ETFs had $36bn in net flows in the first year and now manage around $110bn in assets. However, the dominant players in the US crypto market who launched Bitcoin spot ETFs in January 2025 are currently experiencing notable outflows, with Bitcoin ETFs seeing withdrawals of $258 million recently, indicating a shift from demand to net selling. Major US crypto exchanges like Coinbase and Kraken remain key platforms in the ecosystem as of late 2025.
Issuers continue to compete for market share by offering fee waivers and promotions. Despite recent outflows, BTC ETFs have seen significant growth in assets and inflows since their launch. Bitcoin's price volatility and safe haven status remain key factors driving its market performance. As the digital asset market evolves, investors and regulators alike will continue to monitor developments closely.
