Original title: (2024 Crypto Spot ETF Panorama Review: 1 Year, $40 Billion)
Original author: Fairy, ChainCatcher
2024 is a historic year for the cryptocurrency market. Over the past decade, the U.S. SEC has rejected at least 30 applications for Bitcoin spot ETFs, but on January 11, 2024, a historical turning point was reached. The U.S. Bitcoin spot ETF was officially approved for listing, achieving a trading volume of $4.6 billion and a net inflow of $628 million on its first day. Subsequently, multiple countries, including Hong Kong and Australia, also launched Bitcoin spot ETFs, further advancing the legalization process of global crypto assets. As of the time of writing, the asset scale of U.S. crypto ETFs has surpassed $122.39 billion, with Hong Kong reaching $46.7 million.
2024 is a year when crypto assets truly shift towards mainstream assets. According to the latest 13-F filings, all types of institutions are currently holders of crypto ETFs, including endowment funds, pension funds, hedge funds, investment advisors, and family offices. In this wave of mainstreaming crypto assets, ETFs for other digital assets like Solana and XRP are also gradually coming into the public eye, further laying the groundwork for development in 2025.
This article will review the key milestones of crypto spot ETFs in 2024, analyze the market performance of crypto ETFs over the year, and look forward to the development prospects of crypto ETFs in 2025.
Key Milestones Review: The Birth Year of Crypto Spot ETFs
Bitcoin Spot ETF 2024 Timeline Review
Rewind to January 11, 2024, when the entire cryptocurrency industry held its breath, and global investors anxiously awaited 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 years of anticipation.
On its first day, the trading volume of the Bitcoin spot ETF exceeded $4.6 billion, with a net inflow of $628 million. In the first three days of listing, the trading volume approached $10 billion.
On January 19, just a week after the launch, the managed assets of the Bitcoin ETF in the U.S. surpassed those of the silver ETF, becoming the second largest ETF commodity category in the U.S.
With the U.S. approving the Bitcoin spot ETF, Hong Kong is not far behind. On April 15, Hong Kong approved the principle of BTC and ETH spot ETFs; on April 24, the Hong Kong Bitcoin spot ETF and Ethereum spot ETF were officially approved; on April 30, six virtual asset spot ETFs were listed and opened for trading on the Hong Kong Stock Exchange.
The first-day fundraising scale of Hong Kong's spot cryptocurrency ETF was approximately HKD 2 billion, with a calculated net asset value of $293 million. The total trading volume for the first day of the six ETFs was approximately HKD 87.58 million (about $12.7 million).
The launch of Hong Kong's cryptocurrency spot ETF has had a profound impact on the financial landscape of the Chinese community and is also an important step towards the further legalization of cryptocurrencies globally. The Hong Kong crypto ETF adopts a physical creation/redemption mechanism, providing a pathway for crypto assets to be converted into traditional financial assets.
Subsequently, countries gradually began approving and trading Bitcoin spot ETFs. On June 4, Australia's first Bitcoin spot ETF officially began trading, and the Thai Securities Commission also approved the first Bitcoin spot ETF in the local market.
On September 23, the U.S. SEC approved the listing of BlackRock Bitcoin ETF options on Nasdaq, and on October 19, the SEC approved various spot Bitcoin ETF options trading. The range of Bitcoin-related derivatives has further expanded, bringing compliant products with trading depth to the market. Bitcoin ETF options allow investors to configure portfolios based on timeline, especially suitable for long-term investments, injecting more compliance and trading depth into the market.
Ethereum Spot ETF 2024 Timeline Review
In 2024, the Ethereum spot ETF welcomed a series of significant developments globally. From Hong Kong to the U.S. and Australia, multiple regions are actively promoting the approval and listing of Ethereum spot ETFs. Ethereum, as the 'dragon second' of the crypto market, is officially stepping in front of traditional investors.
On April 24, the Hong Kong Bitcoin spot ETF and Ethereum spot ETF were officially approved, marking the first time Ethereum spot ETFs have landed on major exchanges. The first day of net inflow for the Hong Kong Ethereum spot ETF was 14,200 ETH, with a trading volume of $2.99 million.
On May 24, the U.S. SEC approved the first 19b-4 filing for a spot Ethereum ETF. This filing is a crucial step for 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 the Ethereum spot ETF. The trading volume of the Ethereum spot ETF on its first day exceeded $1.019 billion, with a net inflow of $106.6 million.
On November 8, the U.S. SEC again postponed its decision on the listing of spot Ethereum ETF options on the New York Stock Exchange. The document stated that the delay aims to conduct more analysis and public opinion, particularly regarding whether the proposed rule changes comply with (the Securities Exchange Act) requirements.
Other crypto-related ETFs 2024 Timeline Review
After the approval of Bitcoin and Ethereum spot ETFs, the Solana spot ETF also experienced a series of significant advancements in 2024. On June 20, the first Solana spot ETF application in North America 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 a second Solana ETF. This is a groundbreaking step for Brazil, bringing more optimism to crypto supporters.
The application for the Solana spot ETF in the U.S. is ongoing. On November 22, Cboe submitted listing applications for four Solana spot ETFs to the SEC, and on December 4, Grayscale sought to convert its Solana trust into a spot ETF and list it on the NYSE. However, shortly after, sources revealed that the SEC had notified at least two institutions applying for Solana spot ETFs that their submitted 19b-4 filings would be rejected. This news indicates that the U.S. remains cautious about 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 U.S.
In addition, various types of crypto-related ETFs have been launched or entered the application stage in November and December, ranging from single crypto assets to multi-asset portfolios, from index-type to income-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 managed assets of ETFs listed in the U.S. exceed $10 trillion, with $40 billion invested in the cryptocurrency sector. Crypto ETFs currently account for 0.4% of the overall ETF market. However, according to K33 Research data, the net inflow of Bitcoin spot ETFs in 2024 accounts for 3.5% of all net inflows of U.S. ETFs in 2024, a significantly higher proportion than traditional asset classes.
Since its launch, the liquidity speed of the Bitcoin ETF is 4.5 times that of the inflation-adjusted Gold ETF. 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, making it the world's largest 'Bitcoin holder.' These achievements undoubtedly demonstrate that the Bitcoin spot ETF is 'the most successful' ETF ever.
As of December 24, the cumulative total net inflow of the U.S. Bitcoin spot ETF reached $35.49 billion, with a total net asset value of $110 billion. Notably, BlackRock's IBIT accounts for nearly 50% of the net asset value, reaching $53.7 billion. It is worth mentioning that the asset scale of IBIT is equivalent to the sum of 50 ETFs focused on Europe (region + single country), which have existed for 20 years.
Net inflow of Bitcoin spot ETF compared to Bitcoin price chart, source: sosovalue
The performance of the U.S. Ethereum spot ETF 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 the 'Ethereum Core Staking ETP' (ETHC). Coupled with news of Trump's victory, market expectations for the introduction of staking functionality in the Ethereum spot ETF have intensified.
As of December 24, the cumulative total net inflow of the U.S. Ethereum spot ETF reached $2.51 billion, with a total net asset value of $12.35 billion. On December 5, the net inflow reached $428 million, setting a historical record.
In the U.S. Ethereum spot ETF, the highest net asset value is Grayscale's ETHE, reaching $4.91 billion, followed by BlackRock's ETF with a net asset value of $3.65 billion. Together, they account for 69.3% of the total assets of U.S. Ethereum spot ETFs.
Net inflow of Ethereum spot ETF compared to Bitcoin price chart, source: sosovalue
Which crypto ETFs will be approved in 2025?
Several Solana ETF applications will face their first review deadline from January 23 to 25, 2025. However, according to FOX Business reporter Eleanor Terrett, the SEC has notified at least two institutions applying for SOL spot ETFs that their submitted 19b-4 filings will be rejected. At the same time, sources revealed that the SEC may not approve any new cryptocurrency ETF applications during the current administration.
Bloomberg senior ETF analyst Eric Balchunas expects issuers to reapply after the new SEC chairman Paul Atkins takes office. Paul Atkins co-chairs 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.
The first review deadline for the 10 cryptocurrency index ETFs submitted by Bitwise to the SEC is on January 18, 2025. This ETF encompasses various mainstream crypto assets currently in the market, including BTC, XRP, Solana, Cardano, Uniswap, Polkadot, Chainlink, Ethereum, Avalanche, and Bitcoin Cash.
Bitwise's Bitcoin and Ethereum ETF will undergo its first review deadline on January 30, 2025. This ETF is a proposed spot cryptocurrency index fund consisting of BTC and ETH, aimed at 'allowing investors to balance investments in the two largest crypto assets globally in an accessible manner.'
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 take place in 2025. Bloomberg ETF analyst James Seyffart states that the SEC's final decision may be made around April 9, 2025. However, the SEC is not the only decision-making body; approval from the OCC and CFTC is also needed.
Looking Ahead to 2025
In 2025, more crypto assets may enter the ETF space. Although regulatory challenges still exist, the continued participation of institutional investors and the gradual maturation of the market will provide more momentum 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 component of global portfolios, promoting the deep integration of traditional finance with digital assets.
Here are predictions from industry institutions and KOLs regarding the development of crypto ETFs in 2025:
Forbes predicts: Staking will first be integrated into the Ethereum ETF in 2025. Other cryptocurrency ETFs (such as Solana) will be launched soon, and there may be a weighted cryptocurrency index ETF.
Framework co-founder Vance Spencer predicts that the listing plans for other cryptocurrencies ETFs, excluding Bitcoin and Ethereum, will be delayed until 2026.
Research agency Messari predicts: ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC shifts to positive net flows, making the launch of a spot Solana ETF in the next year or two seem inevitable.
Coinbase states: Looking ahead, the industry's focus is on whether issuers will expand the asset range of ETFs to include more tokens like XRP, SOL, LTC, and HBAR, but we believe these potential approvals may only benefit a limited group of assets.
ETF issuer VanEck predicts: the new SEC leadership (or possibly CFTC) will approve multiple new spot cryptocurrency exchange-traded products (ETPs) in the U.S., including VanEck's Solana products. Ethereum ETP features have been expanded to include staking, further enhancing their utility for holders, while both Ethereum and Bitcoin ETPs support physical creation/redemption. Whether the SEC abolishes rule SAB 121 will pave the way for banks and brokers to custody spot cryptocurrencies.
ETF issuer Bitwise predicts: The inflow of Bitcoin ETFs in 2025 will exceed that in 2024. Trillions of dollars managed by the company will begin to flow into Bitcoin ETFs.
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