Author: Fairy, ChainCatcher
Editor: Nianqing, ChainCatcher
2024 was a historic year for the Bit cryptocurrency market. Over the past decade, the U.S. Securities and Exchange Commission had rejected at least 30 applications for a Bit spot ETF, but on January 11, 2024, a historic turning point arrived. The U.S. Bit spot ETF was officially approved for listing, setting record trading volumes and net inflows. Soon after, multiple countries including Hong Kong and Australia also launched Bit spot ETFs, further advancing the legalization of global crypto assets.
2024 was the year when crypto assets truly transitioned to mainstream assets. According to the latest 13-F filings, all types of institutions are now holders of crypto ETFs, including endowment funds, pension funds, hedge funds, investment advisors, and family offices. In this wave of crypto asset mainstreaming, ETFs of other digital assets such as Solana and XRP also gradually entered the public view, 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 ahead to the development prospects of crypto ETFs in 2025.
Key Milestone Review: The Birth Year of Crypto Spot ETFs
Bit Spot ETF 2024 Timeline
Going back to the early hours of January 11, 2024, the entire crypto industry held its breath as global investors anxiously awaited the final ruling on the U.S. Bit spot ETF. Finally, the words "officially approved" appeared before everyone's eyes, and the Bit spot ETF was successfully launched, fulfilling the long-held expectations of the community.
On the first day, the trading volume of the Bit spot ETF exceeded $4.6 billion, with a net inflow of $628 million. In the first three trading days, the trading volume had reached nearly $10 billion.
On January 19, just one week after its launch, the assets under management of the U.S. Bit ETF had already surpassed the Silver ETF, becoming the second-largest ETF product category in the U.S.
Following the U.S. approval of the Bit spot ETF, Hong Kong did not want to fall behind. On April 15, Hong Kong gave in-principle approval for BTC and ETH spot ETFs; on April 24, Hong Kong officially approved the Bit spot ETF and Ethereum spot ETF; on April 30, 6 virtual asset spot ETFs were listed and opened for trading on the Hong Kong Stock Exchange.
The Hong Kong crypto spot ETFs raised around HKD 2 billion on their first day, with a calculated net asset value of $293 million. The total trading volume of the 6 ETFs on the first day was around HKD 875.8 million (about $127 million).
The launch of Hong Kong's crypto spot ETFs had a profound impact on the financial landscape of the Chinese region and was also an important step in the further legalization of global cryptocurrencies. Hong Kong's crypto ETFs adopted a physical redemption mechanism, providing a channel for crypto assets to be converted into traditional financial assets.
Subsequently, other countries also gradually began to approve and trade Bit spot ETFs. On June 4, Australia's first Bit spot ETF officially began trading, and the Thai Securities Commission also approved the country's first Bit spot ETF.
By September 23, the U.S. SEC approved the listing of BlackRock's Bit ETF options on the Nasdaq, and on October 19, the SEC approved the trading of various Bit spot ETF options. The range of Bit-related derivatives has further expanded, bringing the market compliant and deep trading options products. Bit ETF options allow investors to make term-based portfolio allocations, particularly suitable for long-term investment, injecting more compliance and trading depth into the market.
Ethereum Spot ETF 2024 Timeline
In 2024, the Ethereum spot ETF saw a series of important developments globally. From Hong Kong to the U.S. and Australia, multiple regions were actively pushing forward the approval and listing of Ethereum spot ETFs. As the "second dragon" of the crypto market, Ethereum officially entered the view of traditional investors.
On April 24, the Hong Kong Bit spot ETF and Ethereum spot ETF were officially approved, marking the first time an Ethereum spot ETF was listed on a major exchange. The Hong Kong Ethereum spot ETF had a net inflow of 14,200 ETH and a trading volume of $29.9 million on its first day.
On July 23, the crypto market once again witnessed a historic moment, as the U.S. SEC officially approved the Ethereum spot ETF. The Ethereum spot ETF had a trading volume of over $1.019 billion and a net inflow of $106.6 million on its first day.
On November 8, the U.S. SEC again delayed its decision on the listing of Ethereum spot ETF options on the New York Stock Exchange. The document stated that the delay was to conduct further analysis and public comments, particularly on whether the proposed rule change meets the requirements of the Securities Exchange Act.
Other Crypto-related ETFs 2024 Timeline
After the approval of Bit and Ethereum spot ETFs, Solana spot ETFs also experienced a series of important advancements in 2024. On June 20, the first Solana spot ETF application in North America was submitted, marking Solana ETFs officially entering the public view. Subsequently, 21Shares and VanEck also submitted Solana ETF applications 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 was a pioneering move by Brazil, bringing more optimism to crypto supporters.
The applications for Solana spot ETFs in the U.S. are ongoing. On November 22, Cboe submitted 4 Solana spot ETF listing applications to the U.S. 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 after, sources revealed that the SEC had notified at least two Solana spot ETF applicants that their submitted 19b-4 filings would be rejected. This news indicates that the U.S. is still taking a cautious approach towards Solana spot ETFs.
In addition to Solana, XRP is also a focus of institutional attention. Bitwise, 21Shares, and WisdomTree have currently submitted XRP spot ETF applications in the U.S.
Furthermore, various types of crypto-related ETFs were launched or entered the application stage in November and December, from single crypto assets to multi-asset portfolios, from index-based to yield-generating. This trend signifies the gradual mainstreaming of the crypto market and the further integration of crypto assets with the traditional financial system. Crypto assets are gradually evolving to be recognized as a core asset class by global investors.
How Did the ETF Data Perform This Year?
The total assets under management of ETFs listed in the U.S. exceeded $10 trillion, with $40 billion invested in the crypto currency sector. Crypto ETFs currently account for 0.4% of the overall ETF market. However, according to K33 Research data, the net inflows of the Bit spot ETF in 2024 accounted for 3.5% of the total net inflows of all U.S. ETFs, a proportion significantly higher than traditional asset classes.
Since its launch, the liquidity of the Bit ETF has been 4.5 times faster than the inflation-adjusted liquidity of the Gold ETF. Although the cumulative volume is still behind Gold, the assets under management of the U.S. Bit ETF have already surpassed Gold.
Furthermore, the U.S. Bit spot ETF's BTC holdings have exceeded 1.13 million coins, surpassing Satoshi Nakamoto's Bit holdings, making it the world's largest "Bit holder". These achievements undoubtedly demonstrate that the Bit spot ETF is the "most successful ETF" of all time.
As of December 24, the total net inflow of the US Bitcoin spot ETF reached $35.49 billion, with a total net asset value of $110 billion. Among them, BlackRock's IBIT accounts for nearly 50% of the assets, reaching $53.7 billion. It is worth noting that the asset size of IBIT is equivalent to the total of 50 ETFs focused on Europe (regional + single country), which have existed for 20 years.
Net inflow of Bitcoin spot ETF and Bitcoin price chart, source: sosovalue
The US Ethereum spot ETF has performed poorly in the past, but since November, its inflow and liquidity have increased significantly.
On November 13, ETF issuer Bitwise announced the acquisition of Ethereum staking service provider Attestant. On November 20, 21Shares announced the addition of staking functionality to its Ethereum core ETP product, which was renamed "Ethereum Core Staking ETP" (ETHC). Along with the news of Trump's victory, the market's expectation for the introduction of staking functionality in Ethereum spot ETFs has become stronger.
As of December 24, the total net inflow of the US Ethereum spot ETF reached $2.51 billion, with a total net asset value of $12.35 billion. On December 5, the net inflow reached a record high of $428 million.
Among the US Ethereum spot ETFs, the one with 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. The two together account for 69.3% of the total assets of the US Ethereum spot ETF.
Net inflow of Ethereum spot ETF and Bitcoin price chart, source: sosovalue
Which crypto ETFs will be approved in 2025?
The first review period for multiple Solana ETF applications will be from January 23 to 25, 2025. However, according to FOX Business reporter Eleanor Terrett, the US Securities and Exchange Commission (SEC) has notified at least two applicants for SOL spot ETFs that their submitted 19b-4 filings will be rejected. It is also 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 resubmit their applications after the new SEC chairman, Paul Atkins, takes office. Paul Atkins, who is the co-chair of the Token Alliance of the Digital Chamber, is dedicated to researching and promoting the development of the digital asset industry. His appointment may bring new possibilities for the approval of the Solana ETF.
The first review period for Bitwise's 10 cryptocurrency index ETFs submitted to the SEC will be on January 18, 2025, which will include major cryptocurrencies such as BTC, XRP, Solana, Cardano, Uniswap, Polkadot, Chainlink, Ethereum, Avalanche, and Bitcoin Cash.
Bitwise's Bitcoin and Ethereum ETF will have its first review period on January 30, 2025, which is a proposed spot cryptocurrency index fund composed of BTC and ETH, aiming to "provide investors with an easy-to-access way to balance exposure to the two largest cryptocurrencies globally".
In addition, 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 said the SEC's final decision may be made around April 9, 2025. However, the SEC is not the only decision-making body, and approvals from the OCC and CFTC are also required.
Outlook for 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 maturity of the market will provide more momentum for the future development of the cryptocurrency industry. We can foresee that cryptocurrencies will no longer be just speculative tools, but will become an important part of global investment portfolios, driving the deep integration of traditional finance and digital assets.
Here are the predictions of industry institutions and KOLs on the development of crypto ETFs in 2025:
Forbes predicts: Staking will be first integrated into Ethereum ETFs in 2025. ETFs for other cryptocurrencies (such as Solana) will soon be launched, and there may be the launch of weighted crypto index ETFs.
Framework co-founder Vance Spencer predicts: Plans for ETFs of cryptocurrencies other than Bitcoin and Ethereum will be delayed until 2026.
Research firm Messari predicts: ETF inflows will continue to increase in 2025, especially as Grayscale's GBTC transitions to net positive flows, and a spot Solana ETF launching in the next one to two years seems inevitable.
Coinbase states: Looking ahead, the industry's focus is on issuers potentially expanding the asset range of ETFs to include more tokens like XRP, SOL, LTC, and HBAR, but we believe potential approvals may only benefit a limited asset group.
ETF issuer VanEck predicts: The new SEC leadership (or possibly the CFTC) will approve multiple new spot cryptocurrency exchange-traded products (ETPs) in the US, including a VanEck Solana product. Ethereum ETP functionality will be expanded to include staking, further enhancing its utility to holders, while both Ethereum and Bitcoin ETPs will 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: Bitcoin ETF inflows in 2025 will exceed 2024. Trillions of dollars in assets under management will start flowing into Bitcoin ETFs.
