Author: André Beganski, Decrypt

Translated by: Felix, PANews

This year, as the U.S. SEC adopted a new regulatory approach to cryptocurrency products, ETFs have opened multiple doors for the crypto market on Wall Street.

Although asset management companies previously made great efforts to launch products tracking the spot prices of Bitcoin and Ethereum, the regulatory environment began to change with Donald Trump's return to the presidency in January, leading many companies to foresee potential market opportunities in 2025.

Regarding Bitcoin, according to data from Farside Investors, as of December 15, the spot Bitcoin ETF has accumulated a net inflow of $57.7 billion since its launch in January 2024, a 59% increase from $36.2 billion at the beginning of the year, although the inflow of funds has not been consistently stable.

For example, according to CoinGlass data, on October 6, as Bitcoin approached its historical high of $126,000, investors poured $1.2 billion into the spot Bitcoin ETF. A few weeks later, on November 11, as Bitcoin fell below $90,000, investors withdrew $900 million from these funds.

However, this still marked only the second worst day for the spot Bitcoin ETF on record: in February of this year, due to concerns over trade and inflation, Bitcoin's price plummeted, resulting in a $1 billion outflow from these products.

Regarding Ethereum, according to CoinGlass data, as of December 15, the Ethereum spot ETF has gained a net inflow of $12.6 billion since its launch last July. Notably, in August, as Ethereum surged to nearly $4,950, these ETFs attracted $1 billion in inflows in a single day.

As signs of adoption by financial institutions become increasingly evident, some individuals are focusing on the prospects of more ETFs that could drive up digital asset prices or expand access for new investors. However, others are relatively more interested in ETFs that track multiple cryptocurrencies simultaneously, believing such products are suitable for institutional investors.

Establishing Universal Standards

In September, the U.S. SEC approved universal listing standards for commodity trust shares, a move aimed at responding to the increasingly heated market expectations over the past few months.

The ETF applications piling up on the desks of the U.S. SEC cover a wide range of digital assets. Whether these applications will be approved depends on a question that the previous leadership of the U.S. SEC has avoided for years: under what circumstances should digital assets be considered commodities?

With the introduction of new standards, the U.S. SEC is no longer forced to make individual determinations on the eligibility of various cryptocurrencies, from Dogecoin to presidential meme coins, but has instead clearly outlined the unified conditions under which digital assets qualify as commodity trust funds.

The most important factors include: the digital assets covered by the ETF must be traded on regulated markets and have at least six months of futures trading history, or have provided support for ETFs with significant risk exposure.

Bloomberg senior ETF analyst Eric Balchunas stated in an interview in September that this means at least a dozen cryptocurrencies could immediately "meet the listing requirements." In his view, this move aligns with expectations.

Bloomberg senior research analyst James Seyffart recently stated on the X platform that the approval of universal listing standards is expected to significantly increase the number of products available to investors, but asset management companies are still waiting for the approval results of at least 126 ETFs.

These applications are primarily focused on tokens from emerging decentralized finance projects (such as Hyperliquid) and some relatively new meme coins, such as Mog.

Related: SEC's New Rules Open the Floodgates for Crypto ETFs, Will 10 Major Spot ETFs Launch?

XRP and Solana

Following Bitcoin and Ethereum, U.S. investors can now invest through ETFs that track the spot prices of XRP and Solana, along with various other digital asset-related products.

As the fifth and seventh largest digital assets by market capitalization, XRP and Solana have faced regulatory pressure during the Biden administration, but as they become the underlying assets for more products, this pressure is gradually easing.

Last year, the launch of the spot Bitcoin ETF sparked a surge in demand and drove Bitcoin prices to new highs. Although this effect has not been fully replicated in smaller market cap cryptocurrencies, ETFs specifically targeting XRP and Solana have still attracted a significant number of investors.

Bitwise senior investment strategist Juan Leon stated, "I think the impact of ETFs on prices may not have met people's expectations, but in terms of the uniqueness of the products, they have been a huge success and have proven that investors are interested in assets beyond Bitcoin and Ethereum."

Juan Leon believes that the timing of the launch of the Solana and XRP ETFs in November was "not ideal," as macroeconomic conditions in recent months have led to declining digital asset prices.

Nevertheless, the inflow data remains impressive. According to CoinGlass data, as of December 15, the spot Solana ETF has gained a net inflow of $92 million since its launch; the spot XRP ETF launched in the same month has accumulated approximately $883 million in net inflows.

The launch of the Solana ETF is noteworthy for another reason: it is one of the first ETFs to share a portion of staking rewards with investors. This development is thanks to new guidelines released by the U.S. Treasury and IRS last month.

Although BlackRock, the world's largest asset management company, is one of the institutions that has yet to expand cryptocurrency-related products to more assets, Leon pointed out that the XRP and Solana communities may not need these products.

"From the current operation of the ETFs, the engagement, strength, and scale of these communities far exceed many people's expectations. I think this bodes well for the development of the two ecosystems in 2026."

For instance, according to SoSoValue data, as of December 15, the net inflow for the Dogecoin spot ETF was $2 million.

Index Wars?

According to Gerry O’Shea, global market analysis director at Hashdex Asset Management, in 2025, the primary holders of spot cryptocurrency ETFs are still likely to be individual investors and hedge funds, but this trend is expected to undergo a significant shift soon.

Gerry O’Shea stated that many advisors and professional investors are still conducting due diligence on ETFs that track cryptocurrencies, but he predicts 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 moderate cryptocurrency allocations for private wealth clients starting next year.

About a year ago, the regulatory environment was still fraught with uncertainties, and many institutions were not yet prepared to enter this space. Now, the focus of the market is no longer whether to enter, but 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 noted that many professional investors prefer products with dynamic adjustments to fund holdings over time, which gives them relative peace of mind.

Gerry O’Shea explained, "They can invest in index ETFs to broadly access the growth potential of the market without needing to have all that detailed knowledge. They don't have to be intimately familiar with every asset."

For example, in February of this year, Hashdex launched the first spot ETF tracking multiple digital assets in the U.S.: the Hashdex Nasdaq Crypto Index ETF. This ETF is based on the Nasdaq Crypto Index and holds Cardano, Chainlink, Stellar, and several other mainstream cryptocurrencies.

Additionally, companies such as Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares have also launched similar products, some of which gain exposure to digital assets through derivatives. According to ETF Trends data, this series of index ETFs provides investors with exposure to 19 different digital assets.

Regarding institutional investors, although some pension funds in the U.S. have purchased spot Bitcoin ETFs, the Wisconsin Investment Board liquidated approximately $300 million in holdings around February. This action was disclosed through the 13F filings submitted quarterly by large institutional investors.

Meanwhile, allocations from Middle Eastern and academic institutions have been more proactive. For instance, Al Warda Investments disclosed a $500 million position in BlackRock's spot Bitcoin ETF in November. This investment company is associated with the Abu Dhabi Investment Authority (a subsidiary of Mubadala Investment Company), which is the sovereign wealth fund of Abu Dhabi.

Mubadala Investment Company itself also disclosed a position in BlackRock's product in February, with its latest 13F filing showing that position valued at $567 million. Around the same time, Harvard University's endowment held a $433 million position in BlackRock's ETF. Brown University and Emory University also disclosed their holdings in spot Bitcoin ETFs this year, becoming some of the earliest institutions to adopt this asset class.

Analysts generally believe that this shift among institutional investors could reduce Bitcoin's volatility and lessen its drawdown.

Gerry O’Shea, discussing the expansion of the investment base, stated, "While the changes are not dramatic, they are indeed noteworthy. This shift from retail to institutional investors is very beneficial for the long-term sustainability of assets like Bitcoin, as these institutional investors have a longer investment horizon."

Related: Rooting in the Ruins: The Extreme Differentiation of the Altcoin ETF Market

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