The top eight best-performing newbie ETFs last year were ALL crypto-related. That’s out of around 740 new ETFs in 2024. This is massive news. It establishes crypto as a legit asset class. Wall Street is also waking up to this news, and these guys can have their reservations!
Bitwise pointed out another interesting result. Namely, “56% of financial advisors are now inclined to allocate funds to crypto.” And this is only the beginning. Recently we saw new filings for Cardano ($ADA) and Solana ($SOL) ETFs. So, which one will be the first crypto spot ETF to get approved?
What Is a Crypto Spot ETF?
A crypto spot ETF is an investment vehicle. So, a crypto spot ETF, like Bitcoin or Ethereum spot ETFs, exposes you to these assets. The spot ETF follows the price movements of the underlying asset.
NEW: @EricBalchunas and I took a look at the filings for spot crypto ETFs. We’re putting out relatively high odds of approval across the board. Mainly focused on Litecoin, Solana, XRP, and Dogecoin for now.
Here’s the table with the odds and some other details: pic.twitter.com/xaXaNXLb0M
— James Seyffart (@JSeyff) February 10, 2025
However, your exposure to Bitcoin, or any other asset, is indirect. That’s because you don’t hold the actual underlying asset. The broker that you use holds the actual asset. So, if you buy into a Bitcoin spot ETF, you only own a share that you buy on the stock market. But the broker needs to back each share with actual Bitcoin.
This means that you don’t have to own a crypto wallet. You also don’t need to use a crypto exchange to buy a crypto asset. The brokers hold this in their respective, secured crypto wallets. So, you don’t need to deal with the at times, complex crypto ecosystem. Especially for people new to crypto, this can be a good option. The convenience is a big reason for their success so far.
This model bases itself on the traditional finance world and its investment structures. It’s also regulated, since the SEC needs to approve an ETF. This appeals to both retail and institutions. However, there are also disadvantages. For example,
- You’re still exposed to asset volatility.
- The custodian is still at risk for cyber theft.
- In case the asset hands out rewards, they go to the broker, not to the ETF shareholders.
Are Crypto Spot ETFs Successful?
Currently, there are only two crypto spot ETFs. These are Bitcoin and Ethereum. As it turns out, the launch of the Bitcoin spot ETF is the most successful spot ETF launch ever. On January 10th, 2024, the SEC approved the Bitcoin spot ETFs. So, a bit over a year ago.
However, a year later, it had $107 billion in AUM (assets under mgmt). No other new ETF achieved this kind of volume. In the US, there are 11 providers for Bitcoin spot ETFs. BlackRock is the clear leader. Its IBIT fund alone holds $57 billion in Bitcoin. So, yes, the Bitcoin spot ETF is very successful. You can also see on this chart; the inflows outperform outflows most days.
Source: Coinglass
On the other hand, the Ethereum spot ETFs are not as successful. There are nine providers in the USA. They were approved 23rd July 2024. However, they have not seen the same demand as the Bitcoin ETFs. Still, the fact that there is an Ethereum spot ETF is positive.
In 2025, some experts expect a $150 billion inflow into the Bitcoin ETF alone. That benefits ETH and the entire market, too. There should also be plenty of new ETFs. So, let’s take a look at the two most likely contenders.
“I’m anticipating $150 billion of net inflows into #Bitcoin ETFs by the end of 2025.”
– Ric Edelman ???? pic.twitter.com/YyfWcjd0tu— Vivek⚡️ (@Vivek4real_) April 6, 2024
Solana ($SOL) Spot ETF
The SEC confirmed four filings for Solana spot ETFs yesterday. They were from,
- Canary
- VanEck
- Bitwise Invest
- 21Shares
????BREAKING: ???????? The SEC has officially acknowledged the following Spot @Solana ETF filings today:
•Canary Solana ETF
•@vaneck_us Solana ETF
•@BitwiseInvest Solana ETF
•@21Shares Solana ETF pic.twitter.com/V1by9sPNpb— SolanaFloor (@SolanaFloor) February 11, 2025
We also need to consider the current change of key staff in the SEC. Paul Atkins is going to be the new SEC chair. He’s pro crypto. So, four filings are big news. By the way, if you’re looking for a place to buy $SOL, look no further. BYDFi is the place to be for you.
The Winklevoss twins filed the first ever crypto ETF, for Bitcoin, back in 2013. Now we have four brand new Solana ETF 19b-4 filings. That’s the very first step in the application process. The SEC has now a 45-day window to approve the filing. However, in total, the SEC can grant extensions up to 240 days.
9/ But the Winklevoss wanted to take #Bitcoin mainstream
When $BTC was $100 they filed to create the 1st ETF
The media actually laughed at the idea ???? pic.twitter.com/kB9RGnQoFN
— The Bitcoin Historian (@pete_rizzo_) November 23, 2024
With the changes in the SEC top brass, I would expect a fairly swift approval. Polymarket, the prediction site, has a Solana ETF approval in 2025 at 84% as of today. I would say, the odds look good. What are your thoughts? Let me know in the comments or join our social on Discord or X.
Source: Polymarket
Cardano ($ADA) Spot ETF
Grayscale filed for a Cardano spot ETF. Or, to be precise, NYSE Arca filed on behalf of Grayscale. Now, Grayscale already has various crypto trusts. Among others, Solana, but also for Sui, Aave, XRP and plenty more. 27 in total. As for $ADA, you can also buy this at BYDFi.
NYSE Arca Files For First Cardano ETF On Behalf Of Grayscale
NYSE Arca has filed a 19b-4 form on behalf of Grayscale to create a spot Cardano (ADA) ETF, with Coinbase Custody as the custodian and BNY Mellon as the administrator.
This marks the first ever ETF proposal based on… pic.twitter.com/ISmupDDrnQ
— The Wolf Of All Streets (@scottmelker) February 11, 2025
Grayscale already offers Bitcoin and Ethereum ETF products. So, it seems they have full confidence in Cardano. As a result, $ADA jumped 11% after this news. However, Polymarket only sees a 58% chance for a Cardano spot ETF this year.
Which Crypto Spot ETF Will be First?
This looks like an easy win for Solana, right? Still, don’t underestimate the resilience of Charles Hoskinson, Cardano’s co-founder. On the other hand, if we look at Polymarket, they see Litecoin with an 84% chance for a spot ETF in 2025.
The bottom line is that, most likely, there will be plenty of new crypto spot ETFs this year. However, right now, I see Solana taking the front seat and getting the first approval this year. In all fairness, though, I don’t expect any of these new ETFs to do as well as the Bitcoin ETF. Nonetheless, it’s a massive win for crypto. Let me know your thoughts on this in the comments.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.
We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.
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