Happy New Year, advisors! We look forward to bringing cryptocurrency news to advisors every Thursday this year!
In today’s issue, our first bulletin for the year 2025, Roxana Islam From TMX VettaFi offers a comprehensive guide to the world of cryptocurrency ETFs, looking at what happened in 2024 and what is expected in 2025.
then, Griffin Kelly From The Daily Upside answers questions about ETFs in Ask an Expert.
In the broader cryptocurrency industry, exchange-traded funds (ETFs) have somewhat faded into the background as other tailwinds (e.g., Bitcoin’s strategic reserve potential, increased interest in tokenization, and increased crossover between energy and cryptocurrencies) take center stage. But for advisors, retail investors, and many institutional investors, ETFs are our bridge from TradFi to DeFi and will remain a relevant part of the digital asset story in 2025. If innovation in cryptocurrencies is expected to continue, the crypto ETF ecosystem will Encrypted will change. It also continues to grow. This is where crypto ETFs stand in 2024 and what to watch in 2025.
To put the impact of cryptocurrency ETFs into perspective, here are some interesting numbers from 2024 (YTD through December 26):
ETFs brought in more than $1 trillion in net inflows in 2024. Among the nearly 4,000 ETFs, the iShares Bitcoin Trust (IBIT) had the third-highest inflows ($37.2 billion) after US ETFs with Large Cap, Vanguard S&P 500 ETF (VOO). and iShares Core S&P 500 ETF (IVV).
The iShares Bitcoin Trust (IBIT) has $52.7 billion in assets, more than the iShares Gold Trust (IAU), which has just $33.0 billion in assets. IBIT is now the 35th largest US institutional investor.
The Fidelity Wise Origin Bitcoin Fund (FBTC) is now Fidelity’s largest ETF by assets – with more than $19.6 billion. Fidelity’s second-largest ETF is the Fidelity Total Bond ETF (FBND), at $16.6 billion.
Excluding leveraged ETFs, the Grayscale Bitcoin Trust ETF was the second best-performing ETF (up 145.4% YTD).
In 2024, there were 43 cryptocurrency ETF launches (including conversions). With about 77 crypto ETFs in the US, that means more than half the universe has launched this year.
Nearly half of the 43 cryptocurrency ETFs launched were spot — twelve of which were bitcoin, and nine were ether ETFs.
Twelve of the newly launched funds were leveraged ETFs, and five were discretionary income ETFs. The remaining five were a mix of hedge stocks, cryptocurrency stocks, and multi-asset ETFs.
Five Micro Strategy ETFs (MSTR) are not included in this total number but are still relevant.
Looking ahead to 2025, several ETF applications are already in various stages of approval. With the new crypto-friendly US administration (including a change in SEC leadership), issuers are filling the pipeline with potential new products. There are probably three main areas to watch.
First, there is the potential for more spot ETFs beyond Bitcoin and Ether. VanEck, 21Shares, and Canary Capital have all applied for cryptocurrency ETFs, including the Solana and XRP exchange-traded funds. Canary Capital also applied for… Litecoin ETF and HBAR ETF.
Additionally, there will be more innovation in the way digital assets are packaged into ETF wrappers. This includes registrations for several cryptocurrency index ETFs (multi-token funds). One of the proposed funds is Bitwise Bitcoin and Ethereum Fundwhich would give balanced exposure to both currencies. There were also requests to transfer Grayscale Digital Large Cap Fund (GLDC) and Bitwise 10 Cryptocurrency Index Fund (BITW) To ETFs. These are multi-token funds, which contain Bitcoin, Ether, Solana, and more.
Finally, there’s the “Everything Else” category, which includes literally anything you can think of. For example, Nexo 7RCC Spot Bitcoin and Carbon Credit Futures ETF It is an ESG Bitcoin ETF that will hold approximately 80% of Bitcoin and 20% of carbon credit futures. the Bitwise Bitcoin Standard Corporation ETF You intend to invest in companies that have at least 1,000 Bitcoins in the company treasury. the Strive Bitcoin Bond ETF It is intended to provide exposure to convertible securities issued by MicroStrategy. Additionally, I think we could see more options-based strategies. As we saw in the latter half of 2024, cryptocurrency stocks came back into favor due to renewed interest in MicroStrategy and cryptocurrency miners, who were focused on capitalizing on data center demand.
America remains the home of the ETF. Canada is technically its home country, but since the US accounts for roughly 70% of the global ETF market, I think it’s safe to call the pool expatriate at this point.
However, ETFs are rapidly gaining traction in many foreign markets. In the first 11 months of this year, more than 550 ETFs were launched in the Asia-Pacific region (excluding Japan), and nearly 300 products were launched in Europe, according to ETFGI. As active and crypto ETFs become more attractive, this global adoption trend will only increase.
Q: What is the future of ETFs/ETFs?
2024 was undoubtedly the “Year of the ETF,” with the US alone seeing more than $1 trillion in inflows. Globally, ETFs now hold more than $15 trillion in assets and represent 30% of all invested assets. In the next decade or so, it will likely overtake mutual funds as the dominant investment vehicle. Until this token rocks the boat, every year from now on will likely be an ETF year.
Q: How has America’s approval of Bitcoin and Ether ETFs changed the rules of the game?
Cryptocurrency ETFs are still taking off around the world. Only a few markets offer these services, including Australia, Canada, Switzerland, Brazil and a few others.
The United States has quickly become a leader in spot ETFs after the Securities and Exchange Commission approved the first funds earlier this year. The iShares Bitcoin Trust ETF has net assets of more than $53 billion. Meanwhile, the Grayscale Bitcoin Trust ETF has surpassed $20 billion, and the Fidelity Wise Origin Bitcoin Fund is about to do so. The incoming Trump administration, which is expected to be very pro-crypto, will likely make issuing and accessing cryptocurrency ETFs much easier. You may start to see ETFs popping up that track smaller cryptocurrencies like Dogecoin.
The hype surrounding Bitcoin ETFs in the US is so massive that it may have prompted some investors to pull assets from similar products in other markets. For example, according to TD Securities data published by Bloomberg, Canadian Bitcoin ETFs saw more than $400 million in net outflows this year. Meanwhile, US Bitcoin ETFs recorded inflows of $36 billion.
