Key Notes
- Bitcoin ETFs have gathered $123.87 billion in BTC since their January 2024 approval, followed by Ethereum ETF approvals that further strengthen crypto’s integration with traditional finance.
- Bloomberg analyst Eric Balchunas outlines a strategic rollout of new crypto ETFs, starting with combined BTC/ETH products and expanding to Litecoin, HBAR, and potentially XRP and Solana by 2026.
- The expanding ETF ecosystem signals crypto market maturation, with potential for improved price stability, enhanced liquidity, and stronger market infrastructure as institutional investors enter the space.
January 10, 2024, remains a key date for the crypto industry as the first set of Bitcoin exchange traded funds (ETFs) got approved by the Securities and Exchange Commission (SEC). The 11 ETFs opened a pathway for traditional investors to gain exposure to Bitcoin through regulated investment vehicles.
The impact was evident days after launch, with ETF inflows continuing to the present. According to Coinglass data, more than $123.87 billion worth of BTC has been accumulated through these ETFs, which are managed by various companies.
Building on this momentum, the SEC approved Ethereum ETFs. This signaled growing acceptance of crypto investment vehicles. This expansion of regulated investment options started to strengthen the bridge between traditional finance and the digital asset space, providing investors with diversified crypto exposure through familiar investment structures.
Analyst Projects Multiple Crypto ETF Approvals for 2025
According to Bloomberg analyst Eric Balchunas, 2025 is poised to usher in a new era of cryptocurrency ETFs. Balchunas envisions a strategic rollout, beginning with combined Bitcoin and Ethereum ETFs.
Following these dual-asset products, he anticipates Litecoin ETFs to emerge next, citing its nature as a Bitcoin fork, classifying it as a commodity in regulatory terms.
The analyst’s roadmap continues with HBAR (Hedera) ETFs, notably due to its unique position of not being labeled a security. The final wave, according to Balchunas, could include XRP and Solana ETFs, though these face additional hurdles due to their ongoing security classification disputes.
Adding depth to this analysis, Vance Spencer, co-founder at Framework Ventures, emphasizes that while combined BTC/ETH ETFs are nearly certain for the coming year, the timeline for XRP and Solana ETFs might extend into 2026.
Spencer explains the crucial role of major financial institutions, stating that without support from industry giants like BlackRock and Fidelity, the impact of these ETFs could be limited.
Potential Market Impact of Future Crypto ETF Approvals
The potential approval of these new crypto ETFs could reshape the market dynamics for each affected cryptocurrency. For Litecoin, its position as one of the first altcoins to receive ETF approval could drive significant institutional interest. This could potentially establish it as a core holding alongside Bitcoin and Ethereum in traditional investment portfolios.
HBAR’s unique regulatory position could set a precedent for other newer cryptocurrencies, potentially creating a new category of readily ETF-approved digital assets.
XRP has faced significant regulatory challenges since the SEC filed its lawsuit in December 2020. An ETF approval would signal a major shift in its regulatory status, potentially creating a precedent for other digital assets seeking similar recognition.
This expanding ETF ecosystem represents more than just new investment vehicles; it signifies the maturing of the cryptocurrency market. The potential entry of more institutional investors and some “old money” could lead to more stable pricing and reduced price volatility for the affected cryptos. Many cryptos could begin to have improved market infrastructure, liquidity, and price discovery mechanisms.
Temitope is a writer with more than four years of experience writing across various niches. He has a special interest in the fintech and blockchain spaces and enjoy writing articles in those areas. He holds bachelor’s and master’s degrees in linguistics. When not writing, he trades forex and plays video games.
