Bloomberg: More than a dozen crypto ETFs may be launched by 2025

Author: Vildana Hajric, Bloomberg News; Translated by: Wuzhu, Golden Finance

Providers of exchange-traded funds are finding increasingly creative (and potentially riskier) ways to lure investors into the cryptocurrency craze.

As 2024 draws to a close, the U.S. Securities and Exchange Commission has received a slew of filings for novel products. Proposed products include an ETF from ProShares that would price the returns of the S&P 500 in bitcoin. Planned funds from Strive Asset Management and REX Shares would offer convertible bonds issued by companies to buy bitcoin. ETF company Volatility Shares envisions launching inverse and leveraged Solana funds, while launching a tool that uses futures contracts to track the sixth-largest digital token.

"This is a continued evolution of crypto strategies into ETFs. We're going to see a lot of these products in 2025," said Athanasios Psarofagis of Bloomberg. “It’s hot stuff — issuers like to strike when a theme is hot. We’re going to see everything in crypto.”

All told, if the applications are approved, more than a dozen new crypto-centric funds could enter the space by 2025, a year after the first U.S. bitcoin ETF is launched.

2024 was a banner year for crypto, with bitcoin — the world’s largest digital asset — surging more than 120% to top $100,000. The growth was thanks in part to incoming President Donald Trump’s support for the industry, with many market watchers betting that a lighter regulatory stance from his administration could help the crypto space grow further. Enthusiasm over his election helped drive annual inflows into the largest bitcoin ETF, BlackRock Inc’s, to more than $37 billion, the third-highest among all funds, according to data compiled by Bloomberg.

Michael Saylor, a Bitcoin enthusiast and co-founder of MicroStrategy Inc., also took advantage of the cryptocurrency’s surge in prices to double down on the company’s reserve of the largest token. MicroStrategy has been using a combination of new equity and convertible debt sales to help finance the purchases — and other companies have similar plans.

The REX ETF intends to invest most of its assets in convertible bonds issued by companies that hold bitcoin, according to a filing.Meanwhile, Strive is proposing to launch a fund that would invest in derivatives such as swaps and options to gain exposure to convertible securities issued by MicroStrategy or other companies with similar investment strategies, according to documents filed last week.

“Rarely does a new asset class emerge to the investing public, as is the case with cryptocurrencies now — Wall Street has always been good at creating supply when there’s demand,” said Todd Sohn, ETF strategist at Strategas. “So this is how the range of crypto ETFs has evolved: futures-based, spot, thematic and now convertible products that are highly specific to MicroStrategy and others that are involved in a similar capacity.”