2025 Cryptocurrency ETF Expansion: From Bitcoin and Ethereum to Multi-Currency Ecosystem

2024 has witnessed a historic breakthrough for cryptocurrency spot ETFs. According to Farside Investors data, as of mid-December, Bitcoin spot ETFs have accumulated a net inflow of $57.2 billion since their launch in January last year, representing a 59% increase from the $36.2 billion at the beginning of the year. However, this growth has not been smooth sailing—when Bitcoin approached a record high of nearly $126,000 in October, single-day inflows reached $1.2 billion, but when the price fell below $90,000 in November, single-day outflows hit $900 million. This was not even the worst day in history; in February, amid trade and inflation concerns, there was a single-day outflow of $1 billion.

Ethereum’s performance is similar. Since the launch of spot Ethereum ETFs in July last year, they have accumulated a net inflow of $12.6 billion. The peak occurred in August when Ethereum’s price approached a record high of nearly $4,950, with a single-day inflow of $1 billion. Currently, Ethereum is priced at $3,110, down about 37% from its all-time high.

Regulatory Changes Open the Door to Multiple Cryptocurrencies

A true turning point occurred in September. The U.S. Securities and Exchange Commission(SEC) approved listing standards for commodity trusts, meaning exchanges no longer need to apply case-by-case; instead, digital assets that meet certain criteria can be launched as spot ETFs. The main standards include: digital assets traded on regulated markets, with at least 6 months of futures trading history, or supported by existing large-scale ETFs.

Bloomberg senior ETF analyst Eric Balchunas stated in an September interview that this standard could lead to rapid approval for at least 12 cryptocurrencies. So far, over 126 ETF applications are awaiting approval. Most of these applications involve emerging DeFi project tokens and some new meme coins.

This policy shift coincides with Trump’s return to the White House, and the market generally expects a more friendly regulatory environment for digital assets in 2025, opening new possibilities for investors.

XRP and Solana Break Through

Now, U.S. investors can purchase ETFs tracking the spot prices of XRP and Solana. Based on market capitalization, XRP ranks fifth (circulating market cap of $117.45 billion), and Solana ranks seventh (circulating market cap of $73.03 billion). These two projects faced regulatory challenges during the Biden administration, but with the launch of ETF products, these obstacles are receding.

Juan Leon, Chief Investment Strategist at Bitwise, said that while these two coins’ ETFs may not replicate Bitcoin’s price surge effect, their performance “is quite good,” demonstrating genuine demand among investors for digital assets beyond Bitcoin and Ethereum. Leon pointed out that although the launch in November was “less than ideal” due to macroeconomic pressures and falling prices, data shows that the spot Solana ETF has accumulated a net inflow of $92 million since launch, and the spot XRP ETF has accumulated a net inflow of $883 million after its launch in the same month.

Notably, the Solana ETF has become one of the first products sharing staking yields with investors. The U.S. Treasury Department and IRS issued new guidelines last month that further promote this innovation.

Although the spot Dogecoin ETF has only accumulated a net inflow of $2 million since launch, it already indicates that meme coins are entering the institutional product pipeline.

Multi-Currency Index ETFs Become a New Hotspot

As market participants expand, cryptocurrency index ETFs are becoming another major topic in 2025. Gerry O’Shea, Head of Global Market Insights at Hashdex Asset Management, analyzed that this year, individual investors and hedge funds remain the main holders of spot crypto ETFs, but this situation is about to change. Many financial advisors and professional investors are conducting due diligence.

O’Shea said that the attitude of large asset management firms has shifted from “should we enter” to “how do we participate.” Vanguard recently announced that it will allow 50 million clients to trade certain spot crypto ETFs, and U.S. banks have also approved limited crypto allocations for private wealth clients.

This has driven demand for multi-currency index ETFs. Hashdex launched its first U.S. spot crypto index ETF in February, tracking the Nasdaq Crypto Index, which includes assets like Cardano, Chainlink, Stellar, and others. Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares have also launched similar products. ETF Trends data shows that these index ETFs can provide exposure to 19 different digital assets.

Institutional Power Reshapes Market Dynamics

The expansion of institutional participation is changing the crypto asset ecosystem. Although most U.S. pension funds remain cautious about Bitcoin spot ETFs—Wisconsin Investment Board sold off $300 million in holdings in February—participation from supranational funds and university endowments has reversed this trend.

In November, Al Warda Investments linked to Abu Dhabi Investment Authority disclosed holdings of $500 million in the BlackRock Bitcoin Spot ETF. In February, Mubadala Investment Company disclosed holdings of $567 million in the same product. Harvard University Endowment Fund disclosed holdings of $433 million. Brown University and Emory University also disclosed their Bitcoin spot ETF positions for the first time this year, becoming early institutional participants.

Most analysts believe that the shift from retail to institutional investors could reduce Bitcoin’s volatility. O’Shea noted, “While not drastic, it is significant. Institutional investors have longer investment cycles, which is beneficial for the long-term sustainability of assets like Bitcoin.”

The current Bitcoin price is $91,170, down about 28% from its all-time high; Ethereum is priced at $3,110, down about 37% from its all-time high. This correction creates a more reasonable entry point for new institutional participants and is expected to further drive institutional allocations in 2025.