Author: André Beganski , Decrypt
Compiled by: Felix, PANews
Original Title: 2025 Crypto ETF Year-End Review: Wall Street Bids Farewell to Hesitation, Regulatory Green Light Ushers in the Multi-Asset Era
This year, with the U.S. SEC adopting new regulatory approaches to cryptocurrency products, ETFs have opened many doors for the crypto market on Wall Street.
Despite asset management firms’ previous efforts to launch products that track the spot prices of Bitcoin and Ethereum, the regulatory environment has begun to change with Donald Trump’s return to the presidency in January, and many firms anticipate potential market opportunities in 2025.
Regarding Bitcoin, according to Farside Investors data, as of December 15, spot Bitcoin ETFs have received a cumulative net inflow of $57.7 billion since their initial launch in January 2024, a 59% increase from $36.2 billion at the beginning of the year. However, the inflow of funds has not always been stable.
For example, according to CoinGlass data, on October 6, as Bitcoin approached its all-time high of $126,000, investors poured $1.2 billion into spot Bitcoin ETFs. A few weeks later, on November 11, as Bitcoin fell below $90,000, investors withdrew $900 million from these funds.
However, this was still only the second worst day on record for Bitcoin spot ETFs: in February of this year, these products saw a $1 billion outflow of funds due to a plunge in Bitcoin prices amid concerns about trade and inflation.
Regarding Ethereum, according to CoinGlass data, since its initial launch last July, Ethereum spot ETFs have received a net inflow of $12.6 billion as of December 15th. Notably, in August, as Ethereum surged to a near-all-time high of $4,950, these ETFs saw a single-day inflow of $1 billion.
As signs of adoption by financial institutions become increasingly apparent, some are focusing on the prospect of more ETFs that could drive up digital asset prices or expand access for new investors. However, others are more interested in ETFs that track multiple cryptocurrencies, believing these products are better suited for institutional investors.
Develop general standards
In September, the U.S. Securities and Exchange Commission (SEC) approved a common listing standard for commodity trust units, a move aimed at responding to rising market expectations over the past few months.
The U.S. Securities and Exchange Commission (SEC) is overwhelmed with ETF applications covering a wide range of digital assets. Whether these applications will be approved hinges on a question that previous SEC leadership has avoided for years: under what circumstances should digital assets be considered commodities?
With the introduction of the new standards, the U.S. SEC is no longer forced to make individual eligibility decisions for various cryptocurrencies, from Dogecoin to President Memecoin, but has instead clearly outlined uniform conditions for exchanges to make digital assets comply with Commodity Trust Fund standards.
The most important factors include: the digital assets covered by the ETF must be traded on a regulated market and have at least six months of futures trading history, or already be supported by an ETF with significant risk exposure.
In a September interview, Bloomberg senior ETF analyst Eric Balchunas stated that this means at least a dozen cryptocurrencies could immediately “meet listing requirements.” In his view, this move was in line with expectations.
James Seyffart, a senior research analyst at Bloomberg, recently stated on the X platform that the approval of the general listing standard is expected to significantly increase the number of products available to investors, but asset management companies are still awaiting approval results for at least 126 ETFs.
These applications primarily focus on tokens from emerging decentralized finance projects such as Hyperliquid, as well as some relatively new meme coins, such as Mog.
Related reading:SEC's new rules open the floodgates for crypto ETFs; 10 major spot ETFs expected to launch?
XRP and Solana
Following Bitcoin and Ethereum, US investors can now invest through ETFs that track the spot prices of XRP and Solana, as well as a variety of other digital asset-related products.
As the fifth and seventh largest digital assets by market capitalization, respectively, XRP and Solana both faced regulatory pressure during the Biden administration, but this pressure is gradually easing as they become the underlying assets for an increasing number of products.
Last year, the launch of spot Bitcoin ETFs sparked a surge in demand and drove Bitcoin prices to new highs. While this effect wasn't fully replicated in smaller-cap cryptocurrencies, ETFs specifically targeting XRP and Solana still attracted a significant number of investors.
"I think ETFs may not have had the price impact that people expected, but they have been very successful in terms of product uniqueness and have demonstrated that investors are interested in assets other than Bitcoin and Ethereum," said Juan Leon, senior investment strategist at Bitwise.
Juan Leon believes the timing of launching the Solana and XRP ETFs in November is "not ideal" because macroeconomic conditions in recent months have led to lower prices for digital assets.
Despite this, the inflow data remains impressive. According to CoinGlass data, as of December 15, the spot Solana ETF has received a net inflow of $92 million since its launch; the spot XRP ETF, launched in the same month, has accumulated a net inflow of approximately $883 million.
The launch of the Solana ETF is noteworthy for another reason: it is one of the first ETFs to share a portion of the collateralized returns with investors. This development is made possible by new guidelines issued last month by the U.S. Treasury Department and the IRS.
While BlackRock, the world’s largest asset manager, is one of the few institutions that has not yet expanded its cryptocurrency-related products to more assets, Leon points out that the XRP and Solana communities may not need these products.
"Judging from the current operation of ETFs, the participation, strength and scale of these communities far exceed many people's expectations. I think this is a good sign for the development of both ecosystems in 2026."
For example, according to SoSoValue data, as of December 15, the net inflow into the Dogecoin spot ETF was $2 million.
Exponential Wars?
According to Gerry O'Shea, Global Head of Markets Analysis at Hashdex Asset Management, individual investors and hedge funds will likely remain the primary holders of spot cryptocurrency ETFs in 2025, but this trend is expected to change significantly in the near future.
Gerry O'Shea stated that many advisors and professional investors are still conducting due diligence on cryptocurrency-tracking ETFs, but he judges that these institutions will soon seriously consider allocating to this asset class.
On the other hand, Vanguard announced earlier this month that it will allow its 50 million clients to trade some spot cryptocurrency ETFs on its brokerage platform. Meanwhile, Bank of America has also approved offering modest cryptocurrency allocations to its private wealth clients starting next year.
About a year ago, the regulatory environment was still fraught with uncertainty, and many institutions were not yet ready to enter this field. Now, the market's focus is no longer on whether or not to enter, but on how to enter.
In this sense, Gerry O'Shea believes that ETFs tracking digital asset indices will play a more significant role in discussions next year. He stated that many professional investors appreciate the reassurance that fund portfolios can dynamically adjust over time.
Gerry O'Shea explained, "They can invest in index ETFs, thus gaining broad access to the market's growth potential without having all that detailed knowledge. They don't have to know every single asset."
For example, in February of this year, Hashdex launched the first spot ETF in the US that tracks multiple digital assets: the Hashdex Nasdaq Crypto ETF. This ETF is based on the Nasdaq Crypto Index and holds Cardano, Chainlink, Stellar, and several other mainstream cryptocurrencies.
In addition, companies such as Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares have also launched similar products, some of which provide exposure to digital assets through derivatives. According to ETF Trends data, this series of index ETFs collectively provides investors with exposure to 19 digital assets.
Regarding institutional investors, while some U.S. pension funds purchased spot Bitcoin ETFs, the Wisconsin Investment Board liquidated approximately $300 million in holdings around February. This move was disclosed through quarterly 13F filings by large institutional investors.
Meanwhile, Middle Eastern and academic institutions have been more active in their allocations. For example, Al Warda Investments disclosed in November that it held a $500 million position in BlackRock's spot Bitcoin ETF. This investment firm is affiliated with the Abu Dhabi Investment Board (ADIB), a subsidiary of Mubadala Investments, which is Abu Dhabi's sovereign wealth fund.
Mubadala Investments itself disclosed its holdings in BlackRock's ETF in February, with the position valued at $567 million as of its latest 13F filing. Around the same time, Harvard University's endowment fund held $433 million worth of BlackRock ETFs. Brown University and Emory University also disclosed their holdings of spot Bitcoin ETFs this year, becoming among the earliest institutional adopters of this asset.
Analysts generally believe that this shift by institutional investors could reduce Bitcoin's volatility and minimize its drawdowns.
Gerry O'Shea, speaking about the expansion of the investment base, said: "While the change isn't drastic, it's certainly worth noting. This shift from retail to institutional investors is very beneficial for the long-term sustainability of assets like Bitcoin because these institutional investors have a longer investment horizon."
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