Who knew the investment vehicle famous for popularizing steady returns in the name of unglamorous, passive long-term investing would become the rocket fuel powering bitcoin’s ascension to $100,000?
Spot bitcoin exchange-traded funds, which were first approved by the SEC in January 2024, ushered in an era of mainstream Wall Street adoption that helped propel bitcoin to record heights.
ETFs for everything
ETFs may be known for tracking broad index funds, but they trade like stocks—you can buy and sell them throughout the day on major exchanges. Unlike bitcoin futures ETFs, which have been on the market since October 2021, spot bitcoin ETFs are backed by actual bitcoin. This makes it way simpler for retail investors to invest in the asset, and because it's overseen by the SEC, it also has more robust regulatory protections.
The ETF format also means that, theoretically, institutional investors such as endowments and pension funds could invest in crypto, in addition to laying out a path for financial advisors to recommend these ETFs to clients.
Since launching in mid-January, bitcoin ETFs now represent 1% of all money in ETFs—with over $100 billion assets in the spot bitcoin funds collectively.
In October, the SEC also approved spot ethereum ETFs, which, while not as popular as their bitcoin counterparts, have still drawn in billions in assets.
And that was just the start of the degeneracy unleashed: Since January, an inverse bitcoin ETF has launched, as well as leveraged bitcoin funds and covered call bitcoin ETFs. The SEC also approved options trading on the iShares Bitcoin Trust (IBIT).
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What’s next? With crypto-advocate Paul Atkins nominated for the role of SEC chairman, asset managers are more optimistic than ever about the prospect of getting a whole array of ETFs approved.
Here’s a rundown of some of the ETF filings the SEC could approve in 2025:
- Solana ETFs: Five investment firms, including Bitwise, Grayscale, and VanEck, have filed for a spot solana ETF. While the SEC is reportedly poised to reject the current filings, the asset managers could refile after the Trump administration is in office. Solana is up over 73% in the last 12 months.
- Other spot token ETFs: Asset manager Canary Capital filed for the first-ever litecoin ETF back in October, as well as a ripple ETF and an XRP ETF. While these funds would also hold crypto directly, it's unclear if there’s really the same demand for these lesser-known digital assets, especially given that spot ethereum ETFs are far less popular than bitcoin ETFs.
- Crypto market index funds: Why choose just one crypto? Asset manager Bitwise has filed for an ETF based on its Bitwise 10 Crypto Index Fund (BITW), a closed-end fund. The fund includes bitcoin, as well as smaller stakes in less popular cryptocurrencies like Chainlink and Polkadot.
While it’s unclear whether or not these funds will be approved, one thing is obvious: There are more ways to invest in crypto than ever, and according to the bulls, that means the rally has only just begun.—LB