Author: Fairy, ChainCatcher
Editor: Nianqing, ChainCatcher
2024 is a historic year for the cryptocurrency market. Over the past decade, the U.S. Securities and Exchange Commission rejected at least 30 applications for Bitcoin spot ETFs. However, on January 11, 2024, a historic turning point was reached. The U.S. Bitcoin spot ETF was officially approved for listing, setting astonishing records for trading volume and net inflows. Subsequently, multiple countries, including Hong Kong and Australia, also launched Bitcoin spot ETFs, further advancing the legalization process of global crypto assets.
2024 is the 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 endowments, pension funds, hedge funds, investment advisors, and family offices. In this wave of mainstreaming crypto assets, other digital assets such as Solana and XRP are also gradually coming into the public eye, further laying the groundwork for developments in 2025.
This article will review the key milestones of crypto 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 milestone review: The birth year of crypto spot ETFs
Bitcoin spot ETF time back to 2024
Time returns to January 11, 2024, at midnight, 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 successfully came into existence, fulfilling everyone's long-standing expectations.
On its first day, the Bitcoin spot ETF traded over $4.6 billion, with a net inflow of $628 million. In the first three days after listing, the trading volume approached $10 billion.
On January 19, just a week after trading began, the asset management scale of the U.S. Bitcoin ETF exceeded that of silver ETFs, becoming the second-largest ETF commodity category in the U.S.
With the U.S. approving Bitcoin spot ETFs, Hong Kong did not lag behind. On April 15, Hong Kong tentatively approved BTC and ETH spot ETFs; on April 24, Hong Kong's 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.
Hong Kong's first day of fundraising for the spot cryptocurrency ETF was approximately HKD 2 billion, with a calculated net asset value of USD 29.3 million. The total trading volume of the six ETFs on their first day was approximately HKD 87.58 million (about USD 12.7 million).
The launch of Hong Kong's cryptocurrency spot ETFs has had a profound impact on the financial landscape of the Chinese community and is also an important step towards the further legalization of global cryptocurrencies. The Hong Kong crypto ETF adopts a physical creation and redemption mechanism, providing a pathway for crypto assets to be converted into traditional financial assets.
Subsequently, various countries gradually began to approve and trade Bitcoin spot ETFs. On June 4, Australia's first Bitcoin spot ETF officially began trading, and the Thai Securities and Exchange Commission also approved the local first Bitcoin spot ETF.
On September 23, the U.S. SEC approved the listing of BlackRock's Bitcoin ETF options on Nasdaq. On October 19, the SEC approved the trading of various spot Bitcoin ETF options. The range of Bitcoin-related derivatives has been further expanded, bringing options products to the market that combine compliance and trading depth. Bitcoin ETF options allow investors to make term-based portfolio allocations, particularly suitable for long-term investments, injecting more compliance and trading depth into the market.
Ethereum spot ETF time back to 2024
In 2024, the Ethereum spot ETF saw a series of significant developments globally. From Hong Kong to the U.S., and to Australia, multiple regions around the world are actively promoting the approval and listing of Ethereum spot ETFs. Ethereum, as the 'Dragon 2' of the crypto market, is officially stepping into the spotlight 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 its first day, Hong Kong's Ethereum spot ETF saw a net inflow of 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 key step for the legal trading of Ethereum spot ETFs in the U.S. market, opening the door for Ethereum spot products to officially enter the U.S. market.
On July 23, the crypto market witnessed another historic moment as the U.S. SEC officially approved the Ethereum spot ETF. On its first day, the Ethereum spot ETF traded over $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 states that the delay aims to conduct further analysis and public opinion, particularly regarding whether the proposed rule changes comply with the requirements of the Securities Exchange Act.
Other crypto-related ETFs time back to 2024
After the approval of Bitcoin and Ethereum spot ETFs, the Solana spot ETF also underwent a series of significant advancements in 2024. On June 20, North America's first Solana spot ETF application was submitted, marking Solana ETFs' official entry into the public eye. Subsequently, 21Shares and VanEck also submitted applications for Solana ETFs to the SEC.
On August 8, Brazil's Securities Commission approved the world's first Solana spot ETF. On August 21, Brazil approved its second Solana ETF. This is a pioneering step for Brazil, bringing more optimism to crypto supporters.
The application for the Solana spot ETF in the U.S. continues. 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 into a spot ETF and list it on the New York Stock Exchange. However, following this, sources revealed that the SEC had notified at least two applicants for Solana spot ETFs that their submitted 19b-4 filings would be rejected. This news indicates that the U.S. maintains a cautious attitude towards Solana spot ETFs.
In addition to Solana, XRP is also a key focus for institutions. Currently, Bitwise, 21Shares, and WisdomTree have submitted XRP spot ETF applications in the U.S.
Additionally, various types of crypto-related ETFs are being launched or entering the application stage in November and December, ranging from single crypto assets to multi-asset combinations, from index-based to yield-based. 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 has the ETF data performed this year?
The total assets under management of ETFs listed in the U.S. exceed $10 trillion, with $40 billion allocated to cryptocurrencies. Crypto ETFs currently account for 0.4% of the overall ETF market. However, according to K33 Research data, net inflows to Bitcoin spot ETFs in 2024 will account for 3.5% of all net inflows to U.S. ETFs, a significantly higher ratio than traditional asset classes.
Since its launch, Bitcoin ETFs have a liquidity speed 4.5 times that of gold ETFs adjusted for inflation. Although the cumulative flow still lags behind gold, the asset management scale of U.S. Bitcoin ETFs has surpassed that of gold.
Moreover, the BTC holdings of the U.S. Bitcoin spot ETF have exceeded 1.13 million, surpassing Satoshi Nakamoto's Bitcoin holdings to become 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 U.S. Bitcoin spot ETF has accumulated total net inflows of $35.49 billion, with a total asset net value of $110 billion. Notably, BlackRock's IBIT accounts for nearly 50% of the asset net value, reaching $53.7 billion. It is worth noting that the scale of IBIT's assets is equivalent to the sum of 50 ETFs focused on Europe (regions + single countries), while these European ETFs have existed for 20 years.
Bitcoin spot ETF net inflow and Bitcoin price chart, source: sosovalue
The U.S. Ethereum spot ETF previously performed moderately, but since November, its inflows and liquidity have significantly increased.
On November 13, ETF issuer Bitwise announced the acquisition of Ethereum staking service provider Attestant. On November 20, 21Shares announced the addition of staking features to its Ethereum core ETP product and renamed it 'Ethereum Core Staking ETP' (ETHC). Coupled with news of Trump's election victory, market expectations for the introduction of staking features in Ethereum spot ETFs have intensified.
As of December 24, the U.S. Ethereum spot ETF has accumulated total net inflows of $2.51 billion, with a total asset net value of $12.35 billion. On December 5, the net inflow reached $428 million, setting a historical record.
Among U.S. Ethereum spot ETFs, the highest asset net value is Grayscale's ETHE, reaching USD 4.91 billion, followed by BlackRock's ETF with an asset net value of USD 3.65 billion. Together, they account for 69.3% of the total assets of U.S. Ethereum spot ETFs.
Ethereum spot ETF net inflow and Bitcoin price chart, source: sosovalue
Which crypto ETFs will be approved in 2025?
Multiple Solana ETF applications will face their first review deadline from January 23 to 25, 2025. However, according to FOX Business reporter Eleanor Terrett, the U.S. Securities and Exchange Commission (SEC) has notified at least two applicants for SOL spot ETFs that their submitted 19b-4 filings will be rejected. At the same time, sources revealed that under the current government's administration, the SEC may not approve any new cryptocurrency ETF applications.
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 a proposal for 10 cryptocurrency index ETFs to the SEC, with the first review deadline on January 18, 2025. This ETF encompasses various mainstream crypto assets currently on the market, including BTC, XRP, Solana, Cardano, Uniswap, Polkadot, Chainlink, Ethereum, Avalanche, and Bitcoin Cash.
Bitwise's Bitcoin and Ethereum ETF will have its first review deadline on January 30, 2025. This ETF is a proposed spot cryptocurrency index fund consisting of BTC and ETH, aimed at 'providing investors with a way to balance investments in the two largest crypto assets globally.'
Additionally, the following crypto ETFs are also awaiting approval:
XRP ETF
Bitwise XRP ETF
Canary XRP ETF
21Shares 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 stated 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 OCC and CFTC is also required.
Looking ahead to 2025
In 2025, more crypto assets may enter the ETF space. Despite ongoing regulatory challenges, 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 and digital assets.
The following are predictions from industry institutions and KOLs regarding the development of crypto ETFs in 2025:
Forbes predicts that staking will be integrated into Ethereum ETFs for the first time in 2025. Other cryptocurrencies (such as Solana) will soon launch ETFs, and there may be the launch of weighted crypto index ETFs.
Framework co-founder Vance Spencer predicts that the listing plans for other cryptocurrencies' ETFs, aside from Bitcoin and Ethereum, will be postponed until 2026.
Research firm Messari predicts that 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 within the next year or two seem inevitable.
Coinbase stated: Looking ahead, the industry's focus is on whether issuers may 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 that the new SEC leadership (or possibly the CFTC) will approve multiple new spot cryptocurrency exchange-traded products (ETPs) in the U.S., including VanEck's Solana product. The functionality of Ethereum ETPs is expanding to include staking, further enhancing their practicality for holders, while both Ethereum and Bitcoin ETPs support physical creation/redemption. Whether the SEC or Congress repeals SEC rule SAB 121, it will pave the way for banks and brokers to custody spot cryptocurrencies.
ETF issuer Bitwise predicts that inflows into Bitcoin ETFs will exceed those in 2024. The trillions of dollars managed by the company will begin to flow into Bitcoin ETFs.
