Happy New Year, advisors! We look forward to bringing you cryptocurrency news for advisors every Thursday this year!
In today’s edition, our first newsletter of 2025, TMX VettaFi’s Roxanna Islam provides a comprehensive guide to the world of crypto ETFs, looking at what happened in 2024 and what’s expected in 2025.
Then, The Daily Upside’s Griffin Kelly answers questions about ETFs on Ask an Expert.
– Sara Morton
In the broader crypto industry, exchange-traded funds (ETFs) have taken a backseat as other tailwinds (e.g., a possible strategic reserve of bitcoins, increased interest in tokenization, and greater intersection between energy and cryptocurrencies) take center stage. But for advisors, retail investors, and many institutional investors, ETFs are our bridge between TradFi and DeFi and will continue to be a relevant part of the digital asset story in 2025. If innovation in crypto is expected to continue, then the ecosystem of crypto ETFs will continue. also continue to grow. Here’s where crypto ETFs stood in 2024 and what to expect in 2025.
To put the impact of cryptocurrency ETFs into perspective, here are some interesting figures for 2024 (YTD as of December 26):
ETFs generated more than $1 trillion in net inflows in 2024. Of nearly 4,000 ETFs, the iShares Bitcoin Trust (IBIT) had the third-highest inflows ($37.2 billion) after US large-cap ETFs, the ETF Vanguard S&P 500 (VOO). and the iShares Core S&P 500 ETF (IVV).
The iShares Bitcoin Trust (IBIT) has $52.7 billion in assets, more than the iShares Gold Trust (IAU), which has only $33 billion in assets. IBIT is now the 35th largest ETF in the US.
The Fidelity Wise Origin Bitcoin Fund (FBTC) is now Fidelity’s largest ETF by assets, with more than $19.6 billion. The next largest Fidelity ETF is the Fidelity Total Bond ETF (FBND), at $16.6 billion.
Excluding leveraged ETFs, the Grayscale Bitcoin Trust ETF was the second-best performing ETF (up 145.4% year-to-date).
In 2024, there were 43 crypto ETF launches (including conversions). With around 77 US crypto ETFs, that means more than half of the universe launched this year.
About half of the 43 crypto ETFs launched were spot: twelve were Bitcoin and nine were Ether ETFs.
Twelve of the newly launched ETFs were leveraged ETFs and five were options income ETFs. The remaining five were a mix of covered stocks, crypto stocks, and multi-asset ETFs.
Five single-share Microstrategy ETFs (MSTR) are not included in this total count, but are still relevant.
Looking ahead to 2025, several ETF applications are already in various stages of approval. With the new crypto-friendly US administration (including a change in SEC leadership), issuers are filling the pipeline with potential new products. There will probably be three main areas to consider.
Firstly, there is a possibility that there are more spot ETFs besides bitcoin and Ether. VanEck, 21Shares, and Canary Capital have filed for crypto ETFs, including the Solana and XRP spot ETFs. Canary Capital has also filed for a Litecoin ETF and an HBAR ETF.
Additionally, there will be more innovation in the way digital assets are packaged in ETF wrappers. These include presentations of various crypto index ETFs (multi-token funds). One proposed fund is the Bitwise Bitcoin and Ethereum Fund, which would give balanced exposure to both currencies. There have also been requests to convert the Grayscale Digital Large Cap Fund (GLDC) and the Bitwise 10 Crypto Index Fund (BITW) into ETFs. These are multi-token pools containing bitcoin, Ether, Solana, and more.
Finally, there’s the “everything else” category, which includes literally anything you can think of. For example, the Nexo 7RCC Spot Bitcoin and Carbon Credit Futures ETF is a Bitcoin ESG ETF that will hold approximately 80% bitcoin and 20% carbon credit futures. The Bitwise Bitcoin Standard Corporations ETF aims to invest in corporations that have at least 1,000 bitcoins in their corporate treasury. The Strive Bitcoin Bond ETF aims to provide exposure to convertible securities issued by MicroStrategy. Additionally, I think we may see even more options-based strategies. And as we saw towards the second half of 2024, crypto stocks have once again gained popularity due to revived interest in MicroStrategy and crypto miners, who have pivoted to benefit from data center demand.
– Roxanna Islam, Head of Sector and Industry Research, TMX VettaFi
Q. What is the status of the global ETF industry?
The United States remains the home of the ETF. Canada is technically its birthplace, but given that the US accounts for almost 70% of the global ETF market, I think it’s safe to call the wrapper an expat at this point.
That said, ETFs are rapidly gaining ground in many foreign markets. According to ETFGI, in the first 11 months of this year, more than 550 ETFs were launched in the Asia Pacific region (excluding Japan) and nearly 300 products in Europe. As active and crypto ETFs become increasingly attractive, this trend of global adoption will only increase.
Q. What is the future of ETFs/ETPs?
2024 was undoubtedly “the year of the ETF” as the United States alone experienced inflows of over $1 trillion. Globally, ETFs now hold more than $15 trillion in assets and represent 30% of all invested assets. In the next decade or so, they are likely to overtake mutual funds as the dominant investment vehicle. And until tokenization rocks that ship, every year from now on will likely be the year of the ETF.
Q. How has the US approval of bitcoin and Ether ETFs changed the game?
Crypto ETFs are still taking off around the world. Only a handful of markets offer them, including Australia, Canada, Switzerland, Brazil and a few others.
The United States quickly became a leader in spot ETFs after the Securities and Exchange Commission approved the first ones earlier this year. The iShares Bitcoin Trust ETF has more than $53 billion in net assets. Meanwhile, the Grayscale Bitcoin Trust ETF has surpassed $20 billion, and the Fidelity Wise Origin Bitcoin Fund is about to do so. The incoming Trump administration, which is expected to be very pro-crypto, will likely make it much easier to issue and access crypto ETFs. You may start to see ETFs emerge that track smaller cryptocurrencies like Dogecoin.
The hype around US bitcoin ETFs is so immense that it may have caused some investors to withdraw assets from similar products in other markets. For example, according to TD Securities data reported by Bloomberg, Canadian bitcoin ETFs experienced more than $400 million in net outflows this year. Meanwhile, US bitcoin ETFs have seen inflows of $36 billion.
-Griffin Kelly, reporter, The Daily Upside
The US Securities and Exchange Commission approved the first dual bitcoin and Ether ETFs.
Bitwise announced plans for an exchange-traded fund (ETF) to track public companies that hold more than 1,000 bitcoins in treasury.
A simple LinkedIn post by Andre Dragosh summarizing gold and cryptocurrency ETFs.
