As spot Bitcoin exchange-traded funds (ETFs) mark their first anniversary and Ethereum ETFs reach the six-month milestone, the cryptocurrency market is gearing up for a potential wave of new offerings.
With pro-crypto Donald Trump set to assume the presidency, market participants anticipate a friendlier regulatory environment that could pave the way for additional cryptocurrency ETFs.
Trump’s public endorsement of Bitcoin has already had a noticeable impact.
According to Nicholas Elward, head of institutional product and ETFs at Natixis Investment Managers, Trump’s stance has bolstered confidence in crypto investments.
“As a result, all signs point toward more positive developments for cryptocurrency ETFs in 2025,” Elward wrote in a note.
This optimism extends to spot ETFs—funds that hold actual cryptocurrencies rather than futures.
Asset managers such as 21Shares, Bitwise, WisdomTree, and Canary Capital have filed with the Securities and Exchange Commission (SEC) to launch ETFs tied to popular digital assets like XRP, Solana, Hedera, and Litecoin.
New SEC chair Atkins expected to make it easier for ETFs to gain approval
The SEC’s approach to crypto regulation has been a significant barrier to ETF approvals.
However, with SEC Chair Gary Gensler stepping down on Inauguration Day, analysts expect a shift in tone.
Trump’s nominee for the role, Paul Atkins, has criticized the SEC’s strict stance on digital assets.
This change could ease the path for crypto ETFs to gain approval.
Despite the optimism, regulatory challenges remain. Dom Harz, co-founder of blockchain network firm BOB, told Barron’s “The momentum we’re seeing with Bitcoin and Ethereum ETFs is just the tip of the iceberg.”
For Harz, “there are regulatory hurdles to overcome” before XRP and Solana ETFs are approved.
But “we will see increased movement towards single-asset ETFs across the board in 2025, especially for well-known tokens with strong brands,” he said.
Bitcoin and Ethereum ETFs maintain dominance
While there is excitement about new ETFs, Bitcoin and Ethereum remain the cornerstones of the market.
Bitcoin funds, according to JPMorgan analysts, have more than $100 billion in assets while Ethereum ETFs have $12 billion.
The iShares Bitcoin Trust leads the pack with over $45 billion in assets, and the Grayscale Ethereum Trust dominates the Ethereum ETF space with $4.6 billion.
In contrast, analysts estimate that Solana ETFs may attract only $3 billion to $6 billion in net new assets while XRP funds may get only $4 billion to $8 billion in investments.
JP Morgan analysts said,
We don’t see a next wave of cryptocurrency [ETF] launches as being meaningful for the cryptoecosystem given much smaller market capitalization of other tokens and far lower investor interest.
Harz acknowledged the disparity, noting that Bitcoin and Ethereum have established themselves as dominant ecosystems.
Still, crypto ETFs present a valuable entry point for novice investors, providing exposure to volatile assets without requiring direct ownership.
Opportunities for institutional winners
The evolving crypto ETF landscape is poised to benefit major market players.
Firms like Coinbase, BlackRock, and market maker Virtu have already profited from Bitcoin and Ethereum ETFs and are likely to see further gains if new ETFs are approved.
While demand for second-tier tokens may be more limited, the combination of a pro-crypto administration and a potentially less restrictive SEC has created a cautiously optimistic outlook for 2025.
Bitcoin and Ethereum will likely retain their dominance, but the market is ready for diversification, with institutional players well-positioned to capitalize on the next wave of crypto ETFs.
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