An exchange-traded fund (ETF) is a type of investment vehicle traded on public exchanges.
ETFs are approved by the SEC and allow investors to gain exposure to underlying assets without needing to own them directly. These funds can track both futures and spot prices.
After Ethereum futures ETFs launched, the price of ETH, Ethereum’s native coin, surged from $1,400 in February to an all-time high of $4,170 in May 2021.
Bitcoin futures ETFs, which debuted in October 2021, attracted approximately $8 billion in inflows, helping propel Bitcoin from $40,000 to a new peak of nearly $67,000 within a month.
The Winklevoss Bitcoin Trust filed the first application for a Bitcoin spot ETF back in 2013. However, due to the digital nature of cryptocurrencies and a lack of market transparency at that time, the SEC rejected the proposal in 2022 after years of delay. Other entities attempted to challenge the Commission, but all faced similar setbacks. It was not until January 2024, thanks to advancements in digital vault technology and a shifting political landscape, that the first crypto spot ETFs received approval.
To enter the crypto ETF market, institutional custodians must adhere to rigorous requirements. Key safeguards include:
In January 2024, Bitcoin spot ETFs began trading on public exchanges, leading to a 50% surge in Bitcoin’s price. A year later, the ETF market cap stands at approximately $122 billion in assets under management (AUM). With SEC Chairman Gary Gensler stepping down and crypto advocate Paul Atkins poised to take his place, further investment inflows and ETF market growth are widely anticipated.
ETH spot ETFs launched on July 23, 2024, but despite Ethereum’s fundamentals, its market dominance over the past three years — which peaked at 21% compared to Bitcoin’s 61% — has shown relatively modest performance for ETH spot ETFs. By January 2025, ETH ETFs reached $12.5 billion in AUM, with ETH prices recovering after the August-November 2024 correction back to $3,400.
Bitcoin and Ethereum are not the only cryptocurrencies vying for ETF approval. Solana (SOL), Litecoin (LTC), Ripple (XRP), Hedera (HBAR), as a combined BTC/ETH ETF are all expected to seek approval in 2025 or 2026.
History shows that regulatory changes and subsequent market movements do not always lead to drastic price shifts. Sometimes, asset prices may already reflect anticipated inflows, which means that even billions in ETF investments might not cause major market disruptions. With the total crypto market cap currently around $4 trillion, a few billion dollars are unlikely to be game-changers.
Solana, now ranked 5th by market cap with $124 billion, has been one of the top gainers in recent years. Although its price has experienced significant volatility, it boasts strong fundamentals and widespread adoption. Solana price climbed to $258 during the November 2021 market peak, fell to $9 in December 2022 following the FTX collapse, and has rebounded to $253 per token as of early 2025.
Hedera (HBAR) is another cryptocurrency to watch. With average transaction costs of $0.001, throughput of over 10,000 transactions per second, and energy consumption 3,300 times lower than Ethereum’s, Hedera’s real-world tokenization approach, combined with anticipated ETFs could make headlines in 2025-2026.
ETFs are not inherently high- or low-risk investments. The risk level of a particular ETF depends on the underlying assets it holds. Although cryptocurrencies are gaining broader acceptance, they remain some of the riskiest assets to invest in due to their volatility and the potential demise of specific currencies. Always do your own research and make informed decisions rather than relying solely on others’ advice.
