What a difference a year makes in the cryptocurrency world. Early January 2024 saw asset managers anxiously awaiting the launch of U.S. spot bitcoin exchange-traded funds (ETFs), hoping they’d attract up to $30 billion in their first year.
Fast forward to today, and those issuers are celebrating. The initial wave of bitcoin ETFs brought in a staggering $65 billion in 2024, fueling Bitcoin’s price from $43,000 to over $100,000. BlackRock’s iShares Bitcoin Trust (IBIT) has emerged as the most successful debut in the ETF industry’s 35-year history.
Cryptocurrency enthusiasts are optimistic, believing this is only the beginning. Shortly after the ETFs’ first anniversary on January 10th, President-elect Donald Trump, known for his pro-crypto stance, will be sworn in for a second term. Crypto fans anticipate a new “golden era” for digital assets.
“Everyone is now aware of how much money there is to be made, and with a new, more friendly administration, there’s no reason not to go ahead and file your best ideas with regulators,” said Joe McCann, founder and CEO of the digital assets hedge fund Asymmetric.
While the current SEC chair, Gary Gensler, was compelled to approve the first spot bitcoin ETFs, he continues to highlight the volatility and risks of scams and price manipulation within the crypto market. Paul Atkins, Trump’s probable successor to Gensler, is recognized as a supporter of digital assets.
As of late November, companies including VanEck and 21Shares, anticipating a friendlier regulatory environment, had submitted at least 16 applications to launch ETFs tracking crypto indices or tokens like Solana and Ripple’s XRP, according to SEC filings.
Many industry insiders expected lighter regulation regardless of whether Trump or Vice President Kamala Harris had won the election. “Since it takes several months to get regulatory approvals… many issuers began making a calculated bet that this year, the climate would be different, and wanted to have their products in the queue ready to go,” said Matthew Sigel, head of digital assets research at VanEck, which plans to launch a Solana ETF in 2025.
Canary Capital has filed to launch products tied to Litecoin and HBAR. “The last piece of the puzzle was seeing who the new SEC chair would be – that’s what we were banking on,” explained Steven McClurg, who launched the Valkyrie Bitcoin Fund (BRRR) in January and later founded the crypto asset manager Canary Capital.
The upcoming crypto ETF boom extends beyond single-coin products. New derivative products are set to launch within days of Trump’s inauguration. Several issuers, including Calamos Investments and First Trust, have filed for funds that would use the recently-launched bitcoin ETF options to protect investors from Bitcoin losses, with a launch expected on January 22nd.
The SEC approved options for some Bitcoin ETFs at the end of last year, including BlackRock’s iShares Bitcoin Trust, and approved CBOE Global Markets to launch options tied to the Cboe Bitcoin U.S. ETF Index.
Federico Brokate, head of U.S. business for 21Shares, which has launched Bitcoin and Ethereum ETFs, predicted new products could include funds tied to baskets of cryptocurrencies or track a mix of alternative assets, such as Bitcoin and gold. “Product innovation in the U.S. is just getting started,” he said.
However, such novel products still carry risks. While Bitcoin ETFs have performed well, ether ETFs have had relatively modest inflows. Bitcoin’s price more than doubled in 2024, while ether experienced less substantial gains.
“The only limit on what products emerge will be human creativity,” stated VanEck’s Sigel.
