Despite previous efforts by asset management firms to launch products tracking the spot prices of Bitcoin and Ethereum, the regulatory environment has shifted with President Trump's return to the White House in January, leading many to anticipate new opportunities in 2025. According to Farside Investors, as of December 15th, spot Bitcoin ETFs have seen a net inflow of $57.7 billion since their historic launch in January 2024. This represents a 59% increase compared to the $36.2 billion at the beginning of the year. However, these inflows are not consistently stable. For example, according to CoinGlass data, on October 6th, when Bitcoin's price approached its all-time high of $126,000, investors poured $1.2 billion into spot Bitcoin ETFs. A few weeks later, on November 11th, as Bitcoin's price fell below the $90,000 mark, investors withdrew another $900 million from these funds. However, this was only the second-worst single-day performance in the history of spot Bitcoin ETFs: in February of this year, due to concerns about trade and inflation, Bitcoin's price plummeted, and these products recorded $1 billion in outflows. According to CoinGlass data, since its launch last July, as of December 15th, spot Ethereum ETFs have accumulated $12.6 billion in net inflows. In August, as Ethereum's price surged to a near-all-time high of $4,950, these products received $1 billion in inflows in a single day. As financial institutions become more accepting of these products, they operate largely behind the scenes, as the outside world focuses more on more ETFs that could potentially drive up digital asset prices or expand access to new investors. However, some are relatively focused on ETFs that track multiple cryptocurrencies simultaneously, believing these products are ideal for institutional investors. Developing a Common Standard In September, the U.S. Securities and Exchange Commission (SEC) approved a common listing standard for commodity trusts, a move aimed at addressing months of pent-up expectations. The SEC's desk is piled high with ETF applications covering a wide range of digital assets, and the key to approval lies in a question that previous SEC leadership has avoided for years: when should digital assets be considered commodities? The SEC is no longer forced to decide on the eligibility of various cryptocurrencies (from Dogecoin to the President's memecoin) on a case-by-case basis. Instead, it has established standards for exchanges to make digital assets meet the requirements of commodity trusts. Among the most important factors are: the digital assets backed by the ETF must be traded on a regulated market, have at least six months of futures trading history, or already back an exchange-traded fund (ETF) and hold a significant amount of related assets. Eric Balchunas, senior ETF analyst at Bloomberg, told Decrypt in September that this means at least a dozen cryptocurrencies could be "launched" immediately. He believes this move is in line with expectations. Bloomberg senior research analyst James Seyffart recently stated on X that the approval of the Common Listing Standard will significantly expand the number of products investors can invest in, but asset management firms are still awaiting approval for at least 126 ETFs. These applications are primarily focused on tokens from emerging decentralized finance projects (such as Hyperliquid), as well as some relatively new meme coins, such as Mog. First Bitcoin, then Ethereum. Now, US investors can buy ETFs that track the spot prices of XRP and Solana, as well as several other cryptocurrencies. XRP and Solana, the fifth and seventh largest digital assets by market capitalization respectively, both faced regulatory hurdles during the Biden administration, but these hurdles have gradually dissipated as they become the underlying assets of numerous products. Last year, the launch of Bitcoin spot ETFs triggered a surge in demand, pushing Bitcoin prices to new highs. While other smaller cryptocurrencies haven't seen the same, ETFs specifically tracking XRP and Solana have performed exceptionally well. "I think their impact on price may not have met expectations, but for their uniqueness, they've been incredibly successful and validate investor interest in cryptocurrencies beyond Bitcoin and Ethereum," Juan Leon, senior investment strategist at Bitwise, told us. Leon stated that the timing of the Solana and XRP ETF launches in November was "unfavorable" due to the declining prices of digital assets in recent months caused by macroeconomic conditions. Despite this, according to CoinGlass data, as of December 15th, 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 received approximately $883 million in net inflows since trading began. The launch of the Solana ETFs is noteworthy for another reason: they are among the first ETFs to share a portion of staking rewards with investors. This development was further accelerated last month by new guidance issued by the U.S. Treasury Department and the IRS. BlackRock, the world's largest asset manager, is one of the financial giants that has yet to expand its cryptocurrency product line to other assets. However, Leon points out that the XRP and Solana communities may not need these companies. "Looking at how the ETFs are performing right now, the engagement, strength, and size of these communities far exceed many people's expectations," he said. "I think this bodes well for the development of both ecosystems in 2026." According to SoSoValue, as of December 15th, the spot Dogecoin ETF saw net inflows of $2 million. Index Wars? According to Gerry O’Shea, Global Head of Market Insights at Hashdex Asset Management, individual investors and hedge funds are the most likely groups to hold spot cryptocurrency ETFs in 2025, but this landscape could soon shift substantially. He told us that many advisors and professional investors are still conducting due diligence on ETFs tracking cryptocurrencies, but he feels they may soon begin to seriously consider allocating to such assets. Furthermore, Vanguard announced earlier this month that it will allow its 50 million clients to trade a portion of spot cryptocurrency ETFs on its brokerage platform. Meanwhile, Bank of America has also approved private wealth clients to moderately allocate to cryptocurrencies starting next year. “About a year ago, there was still a lot of uncertainty on the regulatory front, and they weren’t really ready to get involved in this space,” he said. “The question now is no longer whether they should invest, but how they should invest.” In this sense, O’Shea believes that ETFs tracking digital asset indices will be a hot topic next year. He stated that many professional investors appreciate the fact that these funds' holdings change over time, which gives them relative peace of mind. O’Shea explained, “They can allocate to index ETFs to broadly participate in the market's growth potential without needing to master all the details. They don't need to know everything about every specific asset.” In February of this year, Hashdex launched the first spot ETF in the US tracking multiple digital assets—the Hashdex Nasdaq Crypto Index ETF. This ETF is modeled after the Nasdaq Crypto Index and holds cryptocurrencies such as Cardano, Chainlink, and Stellar, as well as some other mainstream cryptocurrencies. Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares have also launched similar products, although some of these invest in digital assets through derivatives. According to ETF Trends data, the index ETF offers investment opportunities in a total of 19 digital assets. While some U.S. pension funds have purchased spot Bitcoin ETFs, the Wisconsin Investment Board liquidated a $300 million position around February. This move was disclosed through a quarterly 13F filing by large institutional investors. Al Warda Investments disclosed in November that it held a $500 million position in the BlackRock Spot Bitcoin ETF. This investment firm is affiliated with the Abu Dhabi Investment Board (an affiliate of Mubadala Investments), Abu Dhabi's sovereign wealth fund. Mubadala Investments itself disclosed its holdings in BlackRock's Bitcoin 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 shares in the ETF, valued at $433 million. Brown University and Emory University also disclosed their holdings in Bitcoin ETFs this year, becoming among the first institutional investors to adopt the asset. Analysts generally believe this shift in investor base could reduce Bitcoin's volatility and minimize its drawdowns. "While the change isn't dramatic, it's certainly noteworthy," said O'Shea, referring to the expansion of the investment base. "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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