Crypto ETFs Surge: Are Asset Managers Betting Big on 2025?

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By the close of 2024, I anticipated a comprehensive transformation within the cryptocurrency sector, particularly in alignment with conventional financial systems. This shift was further accentuated by the impending administration of President Donald Trump, who showed signs of a more accommodating regulatory environment for this dynamic industry within the United States.

It appears that asset managers are not delaying their move to take advantage of the ongoing shift towards cryptocurrencies, as they submitted a large number of applications for crypto-focused exchange-traded funds (ETFs) this week. Here’s an overview of the most recent ETF applications related to digital assets:

1. VanEck Digital Transformation and the Blockchain Economy ETF – This ETF aims to track the performance of companies that are involved in the blockchain ecosystem, including cryptocurrency miners, blockchain technology providers, and other firms that are leveraging blockchain technology for various applications.
2. Bitwise Bitcoin Strategy ETF – The Bitwise Bitcoin Strategy ETF seeks to provide investors with a way to gain exposure to bitcoin through an actively managed fund that invests in futures contracts based on the CME’s Bitcoin futures market.
3. Grayscale’s Bitcoin Trust – Grayscale, one of the largest digital asset managers, has filed for a conversion of its existing Bitcoin Investment Trust into an ETF. If approved, the fund would allow investors to buy shares that track the performance of bitcoin held in a secure custody solution provided by Coinbase Custody.
4. Kryptoin Multi-Asset Fund – The Kryptoin Multi-Asset Fund is a multi-asset ETF that aims to provide investors with exposure to a basket of digital assets, including bitcoin, ethereum, and other cryptocurrencies.
5. WisdomTree Crypto Index Fund – This ETF seeks to track the performance of a proprietary index of 10 digital assets, including bitcoin, ethereum, and other cryptocurrencies. The fund is designed to provide investors with broad exposure to the digital asset class while minimizing volatility through its weighting methodology.
6. First Trust Indxx Innovative Transaction & Process ETF – This ETF seeks to track the performance of companies that are involved in areas such as blockchain technology, artificial intelligence, and other emerging technologies, with a focus on those that have a significant exposure to digital assets.

These applications demonstrate the growing interest among asset managers in offering investors access to the cryptocurrency market through traditional investment vehicles like ETFs. If approved, these funds could open up new opportunities for retail and institutional investors alike to gain exposure to the rapidly evolving digital asset class.

Crypto ETFs Take Center Stage

Last Friday, on January 17th, multiple investment firms submitted applications to the U.S. Securities and Exchange Commission (SEC) for a number of crypto-based exchange-traded funds (ETFs), with at least six being proposed. Notably, asset manager ProShares applied for both leveraged and inverse versions of ETFs focusing on Ripple‘s XRP and Solana.

In simpler terms, a leveraged exchange-traded fund works by intensifying the returns on its underlying asset (such as XRP). On the other hand, an inverse ETF provides investment exposure that goes against, or opposes, the performance trend of the chosen asset.

Additionally, ProShares has submitted proposals for Exchange-Traded Funds (ETFs) tied to XRP and Solana futures with the Security and Exchange Commission. These ETFs provide investors with an opportunity to track the price fluctuations of XRP and Solana by means of future contracts (agreements that allow buyers or sellers to transact assets at a fixed price in the future).

Nate Geraci reports that Valkyrie has applied for an ETF from CoinShares, allowing investors to access the top 10 digital assets based on market capitalization. In a separate move, Tidal has filed for the Oasis Capital Digital Asset Debt Strategy ETF, which will focus on investing in the debt of companies engaged in digital asset-related activities.

This recent surge in ETF filing activity follows applications from Canary Capital and VanEck. Specifically, on Thursday, January 16th, Canary resubmitted an updated S-1 form for a Litecoin ETF.

Simultaneously, asset manager Van Eck submitted a proposal for an “Onchain Economy” exchange-traded fund on January 15. As stated in the application, the ETF aims to invest in businesses spanning the cryptocurrency sector.

2025 Taking Shape?

2025, as predicted, marked the commencement of a flood of cryptocurrency-related exchange-traded funds, and it’s unfolding exactly as planned. With Gary Gensler set to step down from his position on January 20, Paul Atkins, known for his pro-crypto stance, has been put forward as his successor.

A former SEC Commissioner, who served during President George W. Bush’s tenure, is known for championing lenient rules regarding financial markets. It is expected that these impending changes in regulation will pave the way for increased institutional involvement around 2025.

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2025-01-18 22:12