Cryptocurrency exchange-traded funds (ETFs) have outperformed other ETFs in the past year, according to new data from Global X.

Leading the pack, the Global X 21Shares Bitcoin ETF delivered an impressive return of 118.1 percent as of September 30, driven by a falling interest rate environment, increased investor risk appetite and strong inflows into bitcoin products.

Speaking to Investor Daily, Billy Lung, investment strategist at Global X, highlighted that numerous industry developments have supported the cryptocurrency’s success over the past year.

“The big obvious one is that at the beginning of the year the US SEC approved a Bitcoin ETF to allow listing in the US. So it was an important move because A, we've been waiting for a while and B, it has a fundamental impact,” Leung said.

He explained that increased investor flows into Bitcoin ETFs could significantly boost the underlying price of the cryptocurrency, saying, "As we have more ETFs listed, that has also boosted the price of Bitcoin."

Additionally, the Bitcoin halving event earlier this year, while not notable, contributed to a favorable environment for a strong Bitcoin price.

Looking at the present, Leung noted that although October – often referred to as “Uptober” due to its historical association with bullish trends in crypto – is underway, Bitcoin's expected surge has yet to materialize.

This could be due to a number of things, including rising geopolitical tensions and the upcoming US election, especially as former President Donald Trump seems to be moving away from endorsing crypto.

Leung explained that while Trump was once a vocal supporter of cryptocurrency — having earlier this year announced his intention to make the U.S. the "crypto capital of the planet" — his recent silence leads him to believe that bitcoin will rally after the election if A Trump victory in November may no longer be guaranteed.

"We all know Trump is pro-digital assets and pro-cryptocurrencies, but lately he's been softer," he told InvestorDaily.

“The race is getting tighter, so he's dealing with a lot more important variables within the election. So I think it's going to be lower in terms of what he's talking about and what he's really enforcing.

This comes at a bad time for crypto as it struggles with other pressures such as US regulatory concerns and global macroeconomic indicators.

In an analysis published last week, eToro acknowledged the "turbulent market behavior" that bitcoin faced in October, similarly noting that it was driven by a combination of geopolitical events, macroeconomic pressures and changing sentiment among traders.

While citing those who expect the price of bitcoin to crash, some as low as $42,000 by the end of the year, eToro said there is "long-term optimism" for bitcoin, especially as institutional participation grows and regulatory frameworks continue to evolve. .

BTC Markets shares this optimism, comparing the evolution of the crypto industry to the early days of the Internet, where initial excitement was followed by "transformative growth and maturation."

The firm noted a clear shift in the dynamics of cryptocurrency investment globally, with growth driven primarily by non-retail participants, including sole traders, trusts and SMSFs, as opposed to small retail investors.

Looking to the future, BTC Markets said that crypto regulation will be the thing that shapes capital flow.

More specifically on the local landscape, the firm's chief executive, Caroline Bowler, said: “Private equity, venture capital firms and investment banks are eager to list innovative Australian companies through security token offerings, but they are hampered by the outdated local market infrastructure and regulatory framework tailored to traditional markets.

"This limits capital raising for Australian innovators and entrepreneurs - and limits local investors' access to high-quality opportunities."

But, she noted, the future of the local industry looks promising as stakeholders collaborate to advocate for regulatory changes.

The price of Bitcoin was just below US$64,000 on Monday afternoon AEST.