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The SEC approved Ethereum ETFs in July 2024 and Bitcoin spot ETFs in January 2024, increasing expectations for a boom in new ETFs within the cryptocurrency sector in 2025. Industry insiders anticipate a surge in innovation and growth in the crypto ETF market, with the possibility of approvals for ETFs linked to multiple cryptocurrencies.
Nate Geraci, President of ETF Store, predicts that 2025 will be a transformative year for crypto ETFs. He predicts that at least 50 new crypto asset-based ETFs will emerge, including innovative products such as covered call ETFs, equity ETFs tied to Bitcoin, and "Bitcoin bond" ETFs. Furthermore, Geraci expects Bitcoin spot ETFs to surpass the asset size of physical gold ETFs, signaling the mainstream adoption of digital assets.
Several cryptocurrencies are in the race for spot ETF approval in 2025. Bloomberg analysts Eric Balchunas and James Seyffart believe that Litecoin, Hedera, XRP, and Solana could be strong contenders. Additionally, Geraci anticipates that spot ETFs linked to Solana and XRP will likely receive approvals, although regulatory hurdles may delay their launch.
Litecoin may have a greater chance of receiving SEC approval because it has not been classified as a security by the SEC. As a Bitcoin fork, Litecoin is categorized as a commodity, which increases its likelihood of earlier approval. Analysts predict a high probability of SEC approval for a Litecoin ETF by 20257. Nasdaq filed a spot Litecoin ETF application on January 29, 2025, and the SEC has 45 days to respond, with the option to extend the deadline to 90 days.
XRP and Solana are both making progress in their efforts to gain approval for their exchange-traded funds (ETFs). The SEC has accepted Solana's ETF application and is currently reviewing various proposals for an XRP ETF. Traders view Solana's chances of ETF approval in 2025 at 85 percent, while they estimate XRP's chances at 80 percent.
XRP may have a competitive edge following a recent ruling that clarified XRP is not inherently a security. This legal clarity could help simplify its path to ETF approval. However, concerns about Ripple's centralized control over XRP might attract scrutiny from the SEC.
On the other hand, Solana faces challenges regarding its legal classification. Ongoing legal disputes about whether it is considered a security could delay SEC approval, potentially pushing it back to 2026. Despite these obstacles, Solana's strong network activity and established ecosystem position it as a strong contender for ETF approval.
Ethereum's prospects in the ETF space are poised for significant expansion. According to Nate Geraci, 2025 is expected to bring the approval of spot Ethereum ETFs and options trading, introducing a new avenue for investors to hedge against or speculate on price fluctuations. Furthermore, both Bitcoin and Ethereum ETFs are anticipated to adopt in-kind redemption and creation procedures, enhancing investor liquidity and trading efficiency.
The SEC has a lot of factors that will motivate it to accept crypto ETFs. Compared to the previous administration, the current U.S. administration is thought to be more receptive to crypto innovations. The regulatory scene with respect to cryptocurrencies is changing. With the approval of Bitcoin and Ethereum ETFs, the path has been opened for further changes in this market segment, all with respect to crypto ETFs.
Crypto ETFs are considered a significant milestone in the evolution of the crypto market, bridging the gap between cryptocurrencies and traditional finance by offering more conventional investment vehicles. The approval of ETFs for coins like XRP and Solana is expected to not only broaden investment options but also inject more liquidity and stability into the crypto asset class. As a result, crypto ETFs can make digital assets more accessible and appealing to both institutional and retail investors, fostering greater mainstream adoption.
