Original author: Fairy, ChainCatcher
Original editor: Nianqing, ChainCatcher
2024 is a historic year for the cryptocurrency market. In the past decade, the SEC has rejected at least 30 applications for Bitcoin spot ETFs, but on January 11, 2024, a historic turning point arrived. The U.S. Bitcoin spot ETF was officially approved for listing, achieving a trading volume of USD 4.6 billion and a net inflow of USD 628 million on its first day. Subsequently, several countries, including Hong Kong and Australia, also launched Bitcoin spot ETFs, further promoting the legalization process of global crypto assets. As of the time of writing, the asset scale of U.S. crypto ETFs has exceeded USD 122.39 billion, while Hong Kong reached USD 46.7 million.
2024 will be the year when crypto assets truly transition to mainstream assets. According to the latest 13-F filings, all types of institutions are currently holders of crypto ETFs, including endowments, pension funds, hedge funds, investment advisors, and family offices. In this wave of mainstreaming crypto assets, ETFs for other digital assets such as Solana and XRP are also gradually coming into public view, further laying the groundwork for developments in 2025.
This article will review the key milestones of cryptocurrency spot ETFs in 2024, analyze the market performance of crypto ETFs over the past year, and look forward to the development prospects of crypto ETFs in 2025.
Key milestones review: The year of the birth of crypto spot ETFs
Bitcoin spot ETF 2024 timeline review
Back on January 11, 2024, the entire cryptocurrency industry held its breath, with global investors anxiously watching the final ruling on the U.S. Bitcoin spot ETF. Finally, the words 'officially approved' appeared before everyone, and the Bitcoin spot ETF was successfully launched, fulfilling everyone's long-standing expectations.
On the first day, the trading volume of the Bitcoin spot ETF exceeded USD 4.6 billion, with a net inflow of USD 628 million. In the first three days after listing, the trading volume approached USD 10 billion.
On January 19, just a week after trading began, the managed asset scale of the U.S. Bitcoin ETF surpassed that of the silver ETF, becoming the second-largest ETF commodity category in the U.S.
With the approval of Bitcoin spot ETFs in the United States, Hong Kong is not to be outdone. On April 15, Hong Kong in principle approved BTC and ETH spot ETFs; on April 24, Hong Kong Bitcoin spot ETF and Ethereum spot ETF were officially approved; on April 30, six virtual asset spot ETFs were listed on the Hong Kong Stock Exchange and opened for trading.
The first-day fundraising scale of Hong Kong's spot cryptocurrency ETFs was about HKD 2 billion, with a calculated net asset value of USD 293 million. The total trading volume of the six ETFs on the first day was about HKD 87.58 million (about USD 12.7 million).
The launch of cryptocurrency spot ETFs in Hong Kong has had a profound impact on the financial landscape of the Chinese community, and it is also an important step towards the further legalization of cryptocurrencies globally. Hong Kong's crypto ETFs adopt a physical creation and redemption mechanism, providing a pathway for crypto assets to be converted into traditional financial assets.
Subsequently, countries gradually began to approve and trade Bitcoin spot ETFs. On June 4, Australia’s first Bitcoin spot ETF officially started trading, and the Thai Securities Commission also approved the first local Bitcoin spot ETF.
By September 23, the U.S. SEC approved the listing of BlackRock's Bitcoin ETF options on Nasdaq, and on October 19, the SEC approved trading for various spot Bitcoin ETF options. The scope of Bitcoin-related derivatives has further expanded, bringing compliant and deep trading options to the market. Bitcoin ETF options allow investors to configure portfolios based on time frames, making them particularly suitable for long-term investment, injecting more compliance and trading depth into the market.
Ethereum spot ETF 2024 timeline review
In 2024, Ethereum spot ETFs will see significant progress globally. From Hong Kong to the United States and Australia, various regions are actively advancing the approval and listing of Ethereum spot ETFs. Ethereum, as the 'second dragon' in the crypto market, is officially stepping in front of traditional investors.
On April 24, Hong Kong's Bitcoin spot ETF and Ethereum spot ETF were officially approved, marking the first time Ethereum spot ETFs have landed on a major exchange. On the first day, Hong Kong's Ethereum spot ETF had a net inflow of 14,200 ETH, with a trading volume of USD 2.99 million.
On May 24, the U.S. SEC approved the first spot Ethereum ETF's 19b-4 filing. This filing is a key step toward the legal trading of Ethereum spot ETFs in the U.S. market, opening the door for Ethereum spot products to formally enter the U.S. market.
On July 23, the crypto market welcomed another historic moment as the U.S. SEC officially approved Ethereum spot ETFs. The first-day trading volume of Ethereum spot ETFs exceeded USD 1.019 billion, with a net inflow of USD 106.6 million.
On November 8, the U.S. SEC once again postponed its decision on listing spot Ethereum ETF options on the New York Stock Exchange. The document states that the delay aims to conduct further analysis and gather public opinion, particularly regarding whether the proposed rule changes meet the requirements of the Securities Exchange Act.
Other crypto-related ETFs 2024 timeline review
After the approval of Bitcoin and Ethereum spot ETFs, Solana spot ETFs also experienced a series of significant advances in 2024. On June 20, North America's first Solana spot ETF application was submitted, marking the official entry of Solana ETFs into the public eye. Subsequently, 21 Shares and VanEck also submitted applications for Solana ETFs to the SEC.
On August 8, the Brazilian Securities Commission approved the world’s first Solana spot ETF, and on August 21, Brazil approved its second Solana ETF. This is a groundbreaking step for Brazil, bringing more optimism to crypto supporters.
Applications for Solana spot ETFs in the U.S. are ongoing. On November 22, Cboe submitted applications for four Solana spot ETFs to the SEC, and on December 4, Grayscale sought to convert its Solana trust fund into a spot ETF and list it on the NYSE. However, shortly thereafter, news surfaced that the SEC had notified at least two institutions that applied for Solana spot ETFs that their submitted 19b-4 filings would be rejected. This news indicates that the U.S. remains cautious regarding Solana spot ETFs.
In addition to Solana, XRP is also a key focus for institutions. Currently, Bitwise, 21 Shares, and WisdomTree have submitted applications for XRP spot ETFs in the United States.
Moreover, various types of crypto-related ETFs are set to be launched or enter the application phase in November and December, ranging from single crypto assets to multi-asset portfolios, from index-type to yield-type. This trend marks the gradual mainstreaming of the crypto market and demonstrates its further integration with the traditional financial system. Crypto assets are gradually evolving into one of the core assets recognized by global investors.
How did ETF data perform this year?
The total assets managed by ETFs listed in the U.S. exceed USD 10 trillion, with USD 40 billion invested in the cryptocurrency sector. Crypto ETFs currently account for 0.4% of the overall ETF market. However, according to K 33 Research data, the net inflow of Bitcoin spot ETFs in 2024 will account for 3.5% of all net inflows in U.S. ETFs for 2024, a proportion significantly higher than that of traditional asset classes.
Since its launch, the liquidity speed of the Bitcoin ETF is 4.5 times that of inflation-adjusted gold ETFs. Although the cumulative flow still lags behind gold, the asset management scale of the U.S. Bitcoin ETF has surpassed that of gold.
Moreover, the BTC holdings of the U.S. Bitcoin spot ETF have exceeded 1.13 million coins, surpassing Satoshi Nakamoto's Bitcoin holdings, becoming the world's largest 'Bitcoin holder.' These achievements undoubtedly demonstrate that the Bitcoin spot ETF is the 'most successful' ETF in history.
As of December 24, the total net inflow of the U.S. Bitcoin spot ETFs reached USD 35.49 billion, with a total net asset value of USD 110 billion. Notably, BlackRock's IBIT accounts for nearly 50% of the net asset value, reaching USD 53.7 billion. It is worth noting that the asset scale of IBIT is equivalent to the total of 50 ETFs focused on Europe (regional + single country), while these European ETFs have existed for 20 years.
Net inflow of Bitcoin spot ETFs compared to Bitcoin prices, source: sosovalue
The performance of U.S. Ethereum spot ETFs was previously mediocre, but since November, its inflow and liquidity have significantly increased.
On November 13, ETF issuer Bitwise announced the acquisition of Ethereum staking service provider Attestant. On November 20, 21 Shares announced the addition of staking functionality to its Ethereum core ETP product, renaming it "Ethereum Core Staking ETP" (ETHC). Coupled with the news of Trump's victory, market expectations for the introduction of staking functionality in Ethereum spot ETFs have intensified.
As of December 24, the total net inflow of the U.S. Ethereum spot ETFs reached USD 2.51 billion, with a total net asset value of USD 12.35 billion. On December 5, the net inflow reached USD 428 million, setting a historical record.
Among U.S. Ethereum spot ETFs, Grayscale's ETHE has the highest net asset value at USD 4.91 billion, followed by BlackRock's ETF with a net asset value of USD 3.65 billion. Together, they account for 69.3% of the total assets of U.S. Ethereum spot ETFs.
Net inflow of Ethereum spot ETFs compared to Bitcoin prices, source: sosovalue
Which crypto ETFs will be approved in 2025?
Multiple Solana ETF applications will reach their first review deadline between January 23 and 25, 2025. However, according to FOX Business reporter Eleanor Terrett, the SEC has notified at least two institutions that applied for SOL spot ETFs that their submitted 19b-4 filings will be rejected. Insiders have also revealed that the SEC may not approve any new cryptocurrency ETF applications during the current government's tenure.
Bloomberg senior ETF analyst Eric Balchunas expects issuers to resubmit applications after the new SEC Chairman Paul Atkins takes office. Paul Atkins serves as co-chair of the Digital Chamber Token Alliance, dedicated to researching and promoting the development of the digital asset industry. His appointment may bring new possibilities for the approval of Solana ETFs.
Bitwise submitted 10 cryptocurrency index ETFs to the SEC, with the first review deadline on January 18, 2025. This ETF includes various mainstream crypto assets currently in the market, including BTC, XRP, Solana, Cardano, Uniswap, Polkadot, Chainlink, Ethereum, Avalanche, and Bitcoin Cash.
The Bitwise Bitcoin and Ethereum ETF will have its first review deadline on January 30, 2025. This ETF is a proposed spot cryptocurrency index fund composed of BTC and ETH, aimed at "allowing investors to balance investments in the two largest global crypto assets in an easily accessible form."
In addition, the following crypto ETFs are also awaiting approval:
XRP ETF
Bitwise XRP ETF
Canary XRP ETF
21 Shares Core XRP Trust
Wisdomtree XRP Fund
Litecoin ETF
Canary Litecoin ETF
HBAR ETF
Canary HBAR ETF
In addition to ETFs, the approval of Ethereum spot ETF options will also occur in 2025. Bloomberg ETF analyst James Seyffart stated that the SEC's final decision may be made around April 9, 2025. However, the SEC is not the only decision-making body; approvals from the OCC and CFTC are also required.
Looking ahead to 2025
In 2025, more crypto assets may enter the ETF space. Although regulatory challenges still exist, the continuous participation of institutional investors and the gradual maturation of the market will provide more impetus for the future development of the cryptocurrency industry. We can foresee that crypto assets will no longer be merely speculative tools but will become an important part of global portfolios, driving the deep integration of traditional finance and digital assets.
Here are the predictions from industry institutions and KOLs regarding the development of crypto ETFs in 2025:
Forbes predicts that staking will first be integrated into Ethereum ETFs in 2025. Other cryptocurrency ETFs, such as Solana, will be launched soon, and there may be the introduction of weighted cryptocurrency index ETFs.
Framework co-founder Vance Spencer predicts that the listing plans for other cryptocurrencies' ETFs, excluding Bitcoin and Ethereum, will be postponed until 2026.
Research organization Messari predicts that ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC turns to positive net flows, making the launch of a spot Solana ETF seem inevitable in the next year or two.
Coinbase stated: Looking ahead, the industry's focus is on whether issuers will expand the range of assets in ETFs to include more tokens such as XRP, SOL, LTC, and HBAR. However, we believe that these potential approvals may only benefit a limited group of assets.
ETF issuer VanEck predicts that the new SEC leadership (or possibly the CFTC) will approve several new spot cryptocurrency exchange-traded products (ETPs) in the U.S., including VanEck's Solana product. The functionality of Ethereum ETPs will be expanded to include staking, further enhancing their utility for holders, while both Ethereum and Bitcoin ETPs support physical creation/redemption. Whether the SEC or Congress abolishes SEC rule SAB 121, it will pave the way for banks and brokers to custody spot cryptocurrencies.
ETF issuer Bitwise predicts that Bitcoin ETF inflows in 2025 will exceed those in 2024. The tens of trillions of dollars managed by the company will start flowing into Bitcoin ETFs.
