Nate Geraci, president of the ETF Store, has outlined five bold predictions for the crypto exchange-traded funds (ETF) market in 2025.
Sharing his insights on X (formerly Twitter), Geraci highlighted pivotal advancements that could shape the market. Here is a breakdown of his predictions and their implications.
Geraci’s Crypto ETF Predictions as Legal Teams Brace for a Busy Year
Geraci pointed out the heavy workload awaiting ETF legal teams in 2025. He echoed comments from Franklin Templeton’s head of digital assets.
“It feels like ETF legal staff will be busy in the first part of the year,” Geraci shared.
With the crypto ETF space poised for dramatic growth, Geraci shared five developments that are expected to dominate financial headlines.
Combined Spot BTC & ETH ETFs Launch
Geraci anticipates the launch of combined spot Bitcoin and Ethereum ETFs, a move that seems imminent following recent regulatory milestones. As BeInCrypto reported, the SEC (Securities and Exchange Commission) recently approved a dual Bitcoin and Ethereum ETF for Hashdex and Franklin Templeton, which laid the groundwork for the launch of this financial instrument.
These combined ETFs will likely attract broader investor participation, simplifying crypto exposure within a single product. In hindsight, ETF analyst Eric Balchunas predicted a possible launch in January 2025, adding credence to Geraci’s optimism.
“Launch likely in January. They are market cap weight so 80/20 BTC/ETH approx. Notable that Hashdex & Frankie are first. Good for them,” Balchunas shared in December.
Spot ETH ETF Options Trading
Building on the momentum of Bitcoin spot ETF options trading, Geraci predicts the emergence of Ethereum spot ETF options in 2025. The OCC’s (Office of the Comptroller of the Currency) recent approval of Bitcoin ETF options trading has already set the stage for such developments.
BlackRock’s Bitcoin ETF options have performed exceptionally well, with sales surpassing $425 million on the first trading day. Similarly, Grayscale’s Bitcoin ETF options hit the market on November 21. Both advancements suggest Ethereum’s inclusion may only be a matter of time.
Spot BTC & ETH ETF In-Kind Creation
The introduction of in-kind creation and redemption mechanisms for spot BTC and ETH ETFs is another milestone Geraci envisions. This follows landmark SEC approvals of cash-create redemptions for Bitcoin ETFs in January and ETH ETFs in May.
In-kind mechanisms are expected to enhance liquidity and reduce costs, making ETFs more appealing to institutional investors. In hindsight, the debate between cash and in-kind creations was heated in late 2023 as filers campaigned for Bitcoin ETF approvals. The US SEC had encouraged ETFs to do cash creates as opposed to in-kind creates to avoid the use of unregistered brokers.
“The SEC worried about money laundering via in-kind creations in a spot bitcoin ETF, which is why they dug in on cash creations only (which is a much more closed system),” Balchunas noted.
In-kind creations, however, are believed to be better for investors due to spreads and tax consequences. They are considered a better option since they provide the cleanest structure for the issuer and the end investors. Conversely, cash redemptions compel issuers to hold cash equivalents that back their ETFs.
“Have 100 ETF shares equaling 1 bitcoin then the ETF provider has to have at all times the cash equivalent of 1 bitcoin. Makes things an order of magnitude more difficult,” one user on X explained at the time.
Since in-kind creates are arguably better on the taxation and spread front, it is understandable why issuers may still be inclined to push for this policy.
Spot ETH ETF Staking
While the US SEC dislikes staking functionality for ETH ETFs under Gary Gensler’s leadership, Geraci predicts this restriction could change. Initially, major players like BlackRock and Fidelity sacrificed staking capabilities to secure the SEC.
In contrast, European markets have already embraced staking ETPs, with products like Bitwise’s Solana staking ETP gaining traction. If regulatory barriers lift under a pro-crypto administration, ETH ETF staking could become a reality.
Spot SOL ETF Approval
Geraci’s final prediction focuses on the approval of a spot Solana ETF. Although the SEC has recently halted new filings for Solana ETFs, a shift in regulatory stance under the Trump administration could improve the odds. Trump’s pro-crypto position, as highlighted by industry experts, suggests a more favorable environment for novel ETF products.
“The greatest Solana win coming from the new Trump Presidency will be our long-awaited ETF in 2025 or 2026. No surprise, the incredible VanEck team will lead the charge here with support from 21Shares and Canary Capital,” said Dan Jablonski, head of growth at news and research firm Syndica.
As the crypto ETF ecosystem advances, Geraci’s predictions suggest a transformative era for digital asset investment. The convergence of regulatory advancements, institutional interest, and novel product offerings positions crypto ETFs as a cornerstone of the 2025 financial ecosystem.
