• BITCOIN
    • ETHEREUM
    • SOLANA
    • SPOT BITCOIN ETF
    • SPOT ETHEREUM ETF

    Crypto ETFs in 2025: What's to come for Solana, Hedera and more?

    theblock.co 24/12/2024 - 08:01 AM

    Crypto ETFs Poised for Transformation in 2025

    Crypto ETFs are set for a transformative 2025 due to regulatory advancements, expanded asset offerings, and the integration of traditional finance in digital asset custody. The growing momentum around crypto ETFs reflects a maturing market ready for significant progress.

    In less than a year since the approval of spot Bitcoin ETFs for trading, over 5% of Bitcoin's total supply is now held by ETFs, surpassing the estimated 1.1 million BTC held by Satoshi Nakamoto.

    > “Since January, the story of crypto ETFs has been one of continued market maturation,” says Nathan McCauley, CEO and co-founder of Anchorage Digital. “The market is becoming more sophisticated for institutional and retail participants alike.”

    Bitcoin ETFs launched in January, followed by the approval of spot Ethereum ETFs in July. The expanding support for a range of digital assets will be crucial for the crypto ETF narrative moving forward.

    > ETF Store President Nate Geraci notes optimism around potential new crypto ETFs entering the market as regulatory winds shift.

    As the leading player, BlackRock’s iShares Bitcoin Trust (IBIT) boasts $52 billion in assets, while its iShares Ethereum Trust (ETHA) has around $2.6 billion.

    > Jay Jacobs from BlackRock emphasizes that they are just at the beginning of market engagement with Bitcoin and Ethereum, focusing on their current offerings over launching new altcoin ETFs.

    Regulatory Outlook under a New Trump Administration

    Current SEC Chair Gary Gensler is expected to step down on January 20, 2025, coinciding with Trump’s inauguration, who has appointed crypto advocate Paul Atkins to lead the SEC.

    > McCauley anticipates greater regulatory clarity, targeting areas such as SAB 121, stablecoins, and the potential U.S. Bitcoin reserve.

    The expiration of Trump’s Tax Cuts and Jobs Act at the end of next year may open avenues for crypto tax legislation, like the Providing Tax Clarity for Digital Assets bill. However, progress may be slow, as crypto is unlikely to be a legislative priority immediately.

    Will Solana ETFs Emerge?

    The likelihood of Solana ETFs hitting the U.S. market by late 2025 is high, according to Geraci, as the SEC appears to be engaging with issuers positively.

    The precedent set by Bitcoin and Ethereum ETFs, combined with a more crypto-friendly regulatory environment, suggests a SOL ETF could see approval soon. However, pending lawsuits concerning unregistered securities may delay new approvals.

    > “There’s a new sheriff in town, and it’s a crypto-friendly sheriff,” says Bloomberg analyst Eric Balchunas, indicating potential changes to the approval process.

    Potential for XRP or DOGE ETFs

    Many applications for various altcoin ETFs, including Solana, XRP, and Hedera, have been submitted. The new administration could clarify which crypto assets are securities, paving a clearer path for ETF approvals.

    Predictions point toward a wave of new ETFs, including a combination ETF for Bitcoin and Ethereum or distinct altcoin ETFs. Although DOGE has gained market significance, analysts consider Hedera a more viable option from an institutional standpoint. Balchunas opines that ultimately, DOGE may end up as an ETF.

    > Blume notes that while the successful Bitcoin ETFs encourage innovative product development, approval remains uncertain.

    More Allocation, More ETPs

    Cumulative net inflows to Bitcoin ETFs initially surpassed $30 billion, with total ETF flows recently exceeding $913 billion.

    > Bitwise suggests that inflow patterns will boost Bitcoin ETF investment in 2025 due to increased wirehouse participation and growing investor allocations.

    VanEck anticipates the approval of multiple new spot ETPs for both Bitcoin and Ethereum, integrating staking opportunities, and in-kind transactions may lead to substantial inflows, especially with declining interest rates. The repeal of SEC Rule SAB 121 would facilitate better custody options for digital assets, thereby incorporating them into traditional financial systems.




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