Bitcoin funds experienced explosive growth in their second year of existence.

Since they launched in January 2024, spot Bitcoin exchange-traded funds have attracted more than $137 billion in assets under management, according to Dune Analytics. They now hold nearly 7% of the total Bitcoin supply.

Next year, market watchers suggest, will see even more investment.

“2026 is going to be an amazing year for Bitcoin and cryptoassets,” André Dragosch, head of research at Bitwise, told DL News. “We will see an aggressive increase in net inflows into Bitcoin ETFs.”

There’s a trifecta of catalysts: regulatory clarity, the expectation that the Federal Reserve will cut interest rates, and institutional adoption as prominent wealth managers distribute products to clients.

There’s even an auspicious historical precedent.

When gold’s ETF launched in 2004, its most significant inflows came in 2006.

Could digital gold follow the same timeline?

'Wealth managers at big banks like Bank of America and JP Morgan now suggest clients allocate 1 to 5% of their net worth into crypto.’—  Dom Kwok, former Goldman Sachs analyst

Year three acceleration

Forecasting what will happen next year, Dragosch points to an attractive historical pattern.

“We are entering year three after launch, which has historically shown an acceleration in flows compared to previous years,” Dragosch said, citing gold ETFs’ 2004 launch.

Year three, 2006, “saw significantly higher flows than preceding years.”

His logic is simple. Year one brings the early adopters, while year two brings cautious institutions testing allocations.

Finally, year three brings mass adoption as results validate the thesis.

But mass adoption needs infrastructure.

It’s all about distribution

The game-changer for Bitcoin ETFs in 2026 will be distribution, Dragosch said.

Prominent wealth managers that sat on the sidelines are now opening access.

“Major wire houses and asset managers such as Wells Fargo, Bank of America and even Vanguard have finally opened up to distribute bitcoin ETFs to their clients,” the Bitwise exec told DL News.

“That means tens of thousands of wealth advisors will now start distributing these products across the US.”

Katherine Dowling, president of the Bitcoin Standard Treasury Company, emphasised the significance.

“It’s important to underscore the fact that we now have big banks actively recommending Bitcoin exposure and bringing Bitcoin products on their platforms,” Dowling said.

Bank of America’s $3.5 trillion advisor pool can now recommend Bitcoin ETFs. Vanguard took a sharp U-turn and is now offering exposure to its 8 million clients.

“ETFs will be the primary way these new investors get their first taste of crypto,” Dom Kwok, former Goldman Sachs analyst, told DL News.

Moreover, Bitcoin ETFs can now be included in 401(k) retirement plans and defined-contribution schemes, unlocking trillions of dollars held in pension funds.

$220 billion

Mike Marshall, head of research at Amberdata, sees even institutional capital flooding in.

“[More than 80%] of institutions plan to increase crypto allocations, with 59% targeting over 5% of portfolios, pushing Bitcoin ETF assets toward $180–220 billion," Marshall told DL News.

Bitcoin ETF assets hitting $180 to 220 billion would represent massive growth from current levels, which sit at around $147 billion.

“Institutions are warming up to crypto, seeing it as a way of boosting their returns and hedging currency devaluation,” Kwok said.

“Wealth managers at big banks like Bank of America and JP Morgan now suggest clients allocate 1 to 5% of their net worth into crypto.”

They aren’t the only ones, either.

Ric Edelman, a Main Street financial adviser, has been publicly telling investors to allocate up to 40% of their portfolios to crypto.

He’s even added a price target for 2026: Bitcoin to $180,000 by year’s end.

The macro tailwind

Brian Huang, CEO of investment platform Glider, also highlighted improving macro conditions in 2026.

“If we zoom out, the Fed is lowering interest rates. That should bode well for risk assets like Bitcoin ETFs,” Huang told DL News. “Expect BTC to reach $150,000 before year’s end.”

When the Fed cuts rates and central banks ease, liquidity flows into risk assets, and Bitcoin ETFs provide the easiest institutional access point.

Bitwise’s Dragosch also expects global monetary easing to feed through to risk assets.

“We expect a re-acceleration in global growth and return in risk appetite in 2026 because of the preceding amount of monetary easing across the globe.”