Crypto ETFs in 2025: What’s to come for Solana, Hedera and more?
2024-12-24
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Crypto ETFs are poised for a transformative 2025. From regulatory breakthroughs and expanded asset offerings to the evolving role of traditional finance in digital asset custody, the momentum behind crypto ETFs reflects a maturing market ready for its next big leap.
It was not even one year ago that spot Bitcoin exchange-traded funds were approved for trading. Now, more than 5% of bitcoin’s total supply is held by ETFs and the 11 U.S. Bitcoin ETFs have even surpassed the estimated 1.1 million BTC to be held by Satoshi Nakamoto.
“Since January, the story of the crypto ETFs has been one of continued market maturation,” Nathan McCauley, CEO and co-founder of Anchorage Digital, told The Block in an interview. “From the diversification of custody providers to the recent approval of Bitcoin ETF options, the market is becoming more sophisticated for institutional and retail participants alike.” 
Bitcoin ETFs hit the market in January, followed by the approval of spot Ethereum ETFs that began trading in July. Adding support for a wider range of digital assets will be a key part of the crypto ETF story in 2025 and beyond.
“Overall, the crypto regulatory winds have clearly shifted and there’s now a much greater sense of optimism around the possibility of additional crypto ETFs coming to market,” ETF Store President Nate Geraci told The Block.
BlackRock’s iShares Bitcoin Trust (IBIT) is the market leader with $52 billion in assets under management, while its iShares Ethereum Trust (ETHA) clocks in at around $2.6 billion AUM, according to The Block’s data dashboard.
“We’re really just at the tip of the iceberg with Bitcoin and especially Ethereum,” Jay Jacobs, U.S. head of thematic and active ETFs at BlackRock, said on Dec. 12 at a Bloomberg conference. “Just a tiny fraction of our clients own (IBIT and ETHA) so that’s what we’re focused on (vs launching new altcoin ETFs).”
Regulatory outlook under a new Trump administration 
Current U.S. Securities and Exchange Commission Chair Gary Gensler announced he will step down on Jan. 20, 2025, the same day as Trump's inauguration. Trump has tapped long-time crypto supporter Paul Atkins to lead the SEC.
“The next administration and Congress promise to bring greater regulatory clarity to the ecosystem,” McCauley said. “In 2025, the industry will be watching a few key areas: SAB 121, stablecoins, greater regulatory openness to digital asset innovation, and movement around a U.S. strategic Bitcoin reserve.”
Trump's Tax Cuts and Jobs Act, passed in 2017, expires at the end of next year, which could leave room for crypto tax proposals, including a bill called the Providing Tax Clarity for Digital Assets, which would clarify that staking rewards should only be taxed at the time of sale.
"It will take time because crypto will not be the top legislative priority in 2025, but a lot of progress has been made in 2023 and 2024 and that will build up towards getting actual legislation," Greg Xethalis, general counsel at crypto-focused investment firm Multicoin Capital said Dec. 5 at The Block’s Emergence conference.
Is Solana the next candidate?
Could a Solana ETF hit the U.S. market by the end of 2025?
“I believe it’s highly likely that Solana ETFs will be approved by the end of next year at the latest," Geraci said. "It appears the SEC is now engaging with issuers on this product, which is obviously a positive sign."
The success and precedent set by the spot Bitcoin and spot Ethereum ETFs, coupled with a more crypto-friendly administration and regulatory environment, will lead to a SOL ETF within the next year, according to Two Prime Digital Assets CEO Alexander Blume.
"They wouldn’t waste the time and expense to do this if they didn’t have a good sense that they will succeed,” Blume said.
However, the SEC may require the resolution of lawsuits concerning unregistered securities for these assets before approving spot ETFs, JPMorgan analysts said last month, which could delay new ETF approvals or necessitate re-filings.
“There's a new sheriff in town and it's a crypto-friendly sheriff,” Bloomberg senior ETF analyst Eric Balchunas told The Block. “So that's why these little things that we would normally get so hung up on with Gensler, they could all just evaporate.”
Balchunas said the odds a SOL ETF is approved are “decent” but, as of yet, “not a slam dunk.”
What about XRP or DOGE ETFs?
There are currently several filings for a plethora of altcoin ETFs, from Solana to XRP and even Hedera, along with crypto index ETFs from Grayscale and Bitwise.
“I think everything is on the table moving forward under the new administration,” Geraci said. “The hope is that the new administration moves quickly to designate which crypto assets are securities and which aren’t. Once that framework is in place, the approval path for additional spot crypto ETFs should become much clearer."
A list of spot crypto ETF filings as of Dec. 3, 2024. Courtesy of Jeff Seyffart @JSeyff
Balchunas and colleague James Seyffart predict a "wave" of new ETFs could launch, including a bitcoin and ether combo ETF, Litecoin and Hedera funds, and eventually, spot funds for Solana and XRP. Seyffart believes the odds are good that a Litecoin or HBAR ETF could be approved before the other new products, but isn't sure "whether there's investor demand."
Dogecoin may have launched as a joke, but it has grown to become the sixth-largest cryptocurrency by market cap. Hedera is a “far more compelling” candidate that would make more sense from an institutional perspective, said Louis Sykes, a crypto analyst with All-Star Charts.
"Today's satire is tomorrow's ETF," Balchunas said. "You could ask yourself, 'is DOGE a bridge too far?' and I would say 'we'll see.' I think someone's gonna try it because why not?"
DOGE and XRP may struggle to prove they are fair markets as their holdings are highly concentrated, Blume said. Although, he said the incoming SEC will be more permissive in general.
"With the outstanding success of the BTC ETFs, entrepreneurial financial firms will seek to create whatever products might be a success. Now, will they be approved is a different matter,” Blume said.
More allocation, more ETPs
Bitcoin ETFs reached over $30 billion in cumulative total net inflow for the first time since launching in January. Total flows across the entire ETF ecosystem recently crossed the $913 billion mark, breaking the previous record set in 2021.
Bitwise predicts Bitcoin ETFs will attract more flows in 2025 for three key reasons: year one on the market is typically the slowest for ETFs, the largest wirehouses (i.e., Morgan Stanley, Merrill Lynch, etc.) will come online, and investors will “ladder up” their allocation.
“There is a distinct pattern we’ve witnessed at Bitwise over the seven years we’ve been helping investment professionals access crypto: Most investors start with a small allocation and then build on it over time," the world's largest crypto index fund manager said. "We suspect most of the investors that bought bitcoin ETFs in 2024 will double down in 2025."
Chart courtesy of Bitwise's "10 Crypto Predictions for 2025"
VanEck, for its part, predicts that not only will multiple new spot ETPs be approved, but that Ethereum ETPs will include staking, while both Ethereum and Bitcoin ETPs will allow in-kind transactions and redemptions. Some analysts suggest ETH staking yields could drive significant inflows into U.S.-based ETFs, offering attractive returns amid declining interest rates.
“The repeal of SEC Rule SAB 121, either by the SEC or Congress, will pave the way for banks and brokers to custody spot crypto, further integrating digital assets into traditional financial infrastructure,” VanEck analysts said.
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