Overview

On January 23, 2025, U.S. President Donald Trump announced the establishment of the Crypto Task Force. Under the leadership of the new administration, the U.S. SEC has demonstrated a more open regulatory stance toward cryptocurrencies and has set up a dedicated team to clarify ETF approval rules. The shift in policy environment has brought new expectations to the market, opening a window for the accelerated development of crypto ETFs.

Recently, multiple institutions have successively submitted applications for SOL, LTC, and XRP spot ETFs, fueling growing market enthusiasm. The SEC is expected to make a final decision in October 2025, a ruling that will not only profoundly impact the market landscape but could also reshape the crypto investment ecosystem.

Source: https://www.cnbc.com/2025/01/23/trump-signs-executive-order-on-crypto-digital-asset-stockpile.html

What is a Crypto ETF?

A crypto ETF is a fund traded on a stock exchange, with its value typically linked to the price of one or more cryptocurrencies, such as Bitcoin (BTC) or Ethereum (ETH). By purchasing ETF shares, investors can gain exposure to cryptocurrency price fluctuations without the need to hold private keys, manage wallets, or directly interact with blockchain technology.

Classification:

1. Spot ETF:

Directly holds cryptocurrencies (such as BTC or ETH), with the fund’s value matching the real-time market price of the underlying asset. \
For example, the U.S. “iShares Bitcoin Trust (IBIT)” and “Fidelity Ethereum Fund (FETH)” are both spot ETFs. \
The advantage is high tracking accuracy, while the drawback is the need for secure asset custody solutions.

Source: https://www.ishares.com/us/products/333011/ishares-bitcoin-trust-etf

2. Futures ETF:

Based on cryptocurrency futures contracts rather than directly holding crypto assets.
For example, the first Bitcoin futures ETF in the U.S., ProShares Bitcoin Strategy ETF (BITO), was launched in October 2021.
The advantage is easier regulatory approval, while the drawback is potential deviation from spot prices due to futures rollover costs.

Source: https://www.proshares.com/our-etfs/strategic/bito

3. Hybrid/Multi-Asset ETF:

Tracks the performance of a basket of cryptocurrencies (such as BTC, ETH, SOL), providing investors with diversified exposure.
Single-asset crypto ETFs, with fewer hybrid ETFs available still dominate the U.S. market. However, such products have already been introduced in Canada and Europe.
For example, the Purpose Crypto Opportunities ETF, listed in Canada under the ticker CRYP, achieves diversification by investing in various crypto-related assets, including fund shares that directly hold Bitcoin and Ethereum.

Source: https://finance.yahoo.com/quote/CRYP-B.TO/

Main Features:

1. Convenience:
   Can be traded through traditional brokerage accounts (such as Robinhood, Fidelity) without the need to register on a crypto exchange.

2. Liquidity:
   Can be bought and sold throughout the trading day like stocks, with typically high trading volume.

3. Regulatory Compliance:
   Operates in regulated financial markets, making it safer than directly holding cryptocurrencies.

4. Fees:
   Management fees typically range from 0.2% to 2% (e.g., BITO’s management fee is 0.95%), depending on the issuing institution.

Advantages:

Lower Entry Barrier: Suitable for traditional investors who are unfamiliar with blockchain technology.
Security: No concerns about losing private keys or exchanges being hacked.
Institutional Participation: Attracts more institutional funds, driving market maturity.

Risks:

Market Volatility: Cryptocurrency prices fluctuate sharply, affecting the ETF’s value.
Fee Impact: Long-term holdings may see returns eroded by management fees.
Regulatory Uncertainty: Policy changes may impact ETF operations or prices.

Source: https://x.com/TheCryptoLark/status/1882058154093027613

Development History

Source: Reuters

Since Bitcoin gained popularity in 2013, Gemini exchange founders Cameron and Tyler Winklevoss were the first to submit a spot Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC). In the same year, Grayscale launched the Bitcoin Investment Trust. In 2016, the Winklevoss brothers revised their application and appointed State Street as the custodian, while Grayscale also applied to the SEC to convert its Bitcoin Trust into an ETF. In 2017, the SEC rejected the Winklevoss application due to concerns over the immaturity of the Bitcoin market, and Grayscale also withdrew its application to convert the trust into an ETF.

In 2018, the SEC once again rejected the Winklevoss’ second application, citing a lack of measures in crypto exchanges to prevent market manipulation. In 2020, Grayscale converted its trust into an SEC-reporting entity and began trading on the “over-the-counter” market, becoming the first publicly traded Bitcoin fund in the U.S.

Source: SEC

The first approval of a cryptocurrency ETF began in 2021 when Canada launched the world’s first spot Bitcoin ETF, followed by the U.S. approving Bitcoin futures ETFs, laying the foundation for crypto assets to integrate into traditional financial markets. In 2023, global interest in crypto ETFs surged, with multiple institutions submitting applications for spot Bitcoin and Ethereum ETFs. In January 2024, spot Bitcoin ETFs were approved, with the first batch of products (such as IBIT and ARKB) achieving a trading volume of over $4.6 billion on the first day. Subsequently, the spot Ethereum ETF was officially launched on July 23, 2024, further driving the development of cryptocurrency ETFs.

Currently, spot Bitcoin ETFs have been registered in 10 countries/regions and are traded in markets including the U.S., Canada, Hong Kong, Germany, Brazil, and Australia. As the market matures, crypto ETFs for Solana, XRP, and LTC are entering the approval process, and more crypto asset ETFs may be introduced in the future.

Source: Bitcoin Treasuries

Progress Overview

With the approval of Bitcoin and Ethereum spot ETFs in recent years, the crypto market has attracted increased attention from mainstream financial institutions. Several institutions have submitted spot ETF applications for cryptocurrencies such as ADA, XRP, SOL, LTC, and DOGE to the U.S. Securities and Exchange Commission (SEC).

Detail

Overview of Crypto Spot ETF Application Progress (2025)

Currently, Solana (SOL) and Litecoin (LTC) have the highest number of spot ETF applications, with five issuers each. Major institutions have submitted 19b-4 filings for SOL, LTC, and XRP spot ETFs. However, the SEC has only accepted applications for Grayscale’s Solana ETF, Litecoin Trust, and Canary’s Litecoin ETF.

According to regulations, once the SEC accepts a 19b-4 filing, it will be published in the Federal Register, initiating a 21-day public comment period. The SEC must then decide within 45 days whether to approve the application, though it can extend the review period to 90 days or a maximum of 240 days. If the proposal meets the Securities Exchange Act requirements—such as protecting investors and ensuring market fairness—it will be approved; otherwise, it will be rejected.

For ETFs, even if the 19b-4 filing is approved, the S-1 registration statement must also be cleared before the ETF can be listed for trading.

Source: https://x.com/martypartymusic/status/1864073420477989071

BTC ETF: Approved in January 2024

After the approval of spot BTC ETFs in January 2024, they rapidly expanded. The U.S. market now has 11 spot ETFs, attracting billions of dollars in capital inflows.

Bitcoin’s price has been significantly impacted by ETFs. For example, when BlackRock’s IBIT surpassed $50 billion in assets, Bitcoin’s price briefly surged to $108,000.

Similar products exist globally in Canada, Germany, Brazil, and other regions, indicating the internationalization trend of BTC ETFs.

ETH ETF: Approved by the U.S. SEC

United States: In May 2024, the U.S. Securities and Exchange Commission (SEC) approved the first proposals for spot Ethereum ETFs, which were officially listed for trading on July 23. Institutions such as BlackRock (ticker: ETHA) and Fidelity (ticker: FETH) launched products.

On the first trading day, volume exceeded $500 million, demonstrating strong market interest. However, compared to Bitcoin ETFs, their scale remains smaller.

Hong Kong: In April 2024, Hong Kong approved the first batch of Bitcoin and Ethereum ETFs, which began trading on April 30, aiming to establish the region as a crypto financial hub.

Other Regions: Canada, Europe, and other regions have also introduced similar products, with some even supporting ETH staking, offering additional annualized returns.

List of Some Spot Ethereum ETFs in the U.S. Market:

Source: https://x.com/JSeyff/status/1815958023317205232

SOL Spot ETF: Five Institutions Applied, Grayscale Application Accepted by SEC

Five issuers have submitted applications for a Solana (SOL) spot ETF:

• Grayscale (plans to convert the Solana Trust into a spot ETF)
• Bitwise, VanEck, 21Shares, Canary Capital

Previously, multiple institutions had their SOL spot ETF applications rejected by the SEC. On January 29, 2025, the Cboe BZX Exchange resubmitted 19b-4 filings for Bitwise, VanEck, and others. The next round of SEC review is scheduled for March 30 and April 3.

Notably, the SEC has officially accepted Grayscale’s Solana ETF 19b-4 application. Bloomberg analyst James Seyffart believes this could be a positive signal, as the SEC previously considered Solana a security. Meanwhile, Bloomberg senior ETF analyst Eric Balchunas noted that this marks the first time the SEC has accepted an ETF application tracking a token previously classified as a security, potentially reflecting changes in regulatory oversight.

Source: X

XRP Spot ETF: Five Institutions Applied, All Submitted 19b-4 Filings

Currently, Grayscale, Bitwise, Canary Capital, 21Shares, and WisdomTree have submitted applications for an XRP spot ETF:

• Grayscale filed a 19b-4 application on January 30, planning to convert the XRP Trust into a spot ETF.
• Bitwise, 21Shares, and Canary Capital submitted 19b-4 applications through the Cboe BZX Exchange on February 6, seeking approval for XRP spot ETF listings.

Once the SEC confirms acceptance, the application will be published in the Federal Register, officially entering the review process.

Source: X

LTC Spot ETF: Applications from Grayscale and Canary Accepted by SEC

Currently, only Grayscale and Canary Capital have submitted LTC spot ETF applications:

Canary Capital filed a 19b-4 application on January 16.

Grayscale submitted its application on January 24.

The SEC has officially accepted both LTC ETF applications, which are now in the 21-day public comment period. The SEC may approve, reject, or extend the review process.

Source: X

Other Crypto Spot ETF Application Updates

Beyond SOL, XRP, and LTC, other crypto spot ETF applications are also progressing:

• In January, Rex applied for multiple ETFs, including the Trump ETF and BONK ETF.
• In February, the New York Stock Exchange (NYSE) Arca submitted a Dogecoin spot ETF application to the SEC.
• 21Shares submitted an S-1 registration application for a Polkadot spot ETF.

The SEC remains cautious about crypto spot ETF approvals. However, with the acceptance of Grayscale’s Solana ETF application, the market generally believes the regulatory landscape is shifting, increasing the likelihood of future approvals.

Source: X

Possible Future ETFs

The success of Bitcoin ETFs has paved the way for institutional funds to enter the crypto market. In the future, the ETF sector will expand from single assets to multiple assets (BTC → ETH → other mainstream assets), from spot ETFs to staking-enabled ETFs (ETH staking ETF), and from L1 public chains to specific sectors such as DeFi, AI, and RWA. Meanwhile, the industry will gradually move towards compliance and standardization from a traditional institutional perspective. As more ETFs gain approval, the institutionalization of the crypto market will continue to deepen, pushing the industry towards maturity.

Multi-Asset Crypto ETF

1. Investing in multiple mainstream crypto assets, similar to index funds in traditional markets, providing a more diversified investment portfolio.

Potential Impact:

• Reduces the volatility risk of a single asset and enhances portfolio stability.
• Attracts a broader range of institutional funds, driving overall market growth.
• Increases market liquidity for mainstream crypto assets.

Possible Components: BTC, ETH, SOL, XRP, LTC, DOT, etc.

Risks:
The risks of multi-asset crypto ETFs mainly lie in asset selection, market volatility, and regulatory uncertainty. Although such ETFs achieve risk diversification through multi-asset investment and enhance portfolio stability, the differences in volatility among various crypto assets may lead to the overall portfolio’s performance being significantly influenced by market conditions.

Additionally, crypto market regulations are still evolving, which could introduce compliance risks affecting fund operations and investor confidence. As more institutional funds enter, market liquidity and competition may increase, but this also brings uncertainty and potential policy risks.

Implementation Challenges:

• Asset Selection Difficulty: Balancing the volatility and market risks of multiple crypto assets to ensure that the ETF maintains stability in an unpredictable market remains a challenge.

2. Public Chain Ecosystem ETF

An ETF focused on a specific public blockchain, investing in its native token and core ecosystem projects.

Potential Impact:

• Drives the growth of ecosystem projects, boosting confidence among developers and investors.
• Enhances the capital operation capabilities of the public chain ecosystem, promoting long-term sustainable development.
• Strengthens the connection between the crypto industry and traditional markets, increasing institutional capital inflows.

Possible Public Chain ETFs:

• Solana ETF (SOL + ecosystem projects such as Jito, Marinade, etc.)
• Avalanche ETF (AVAX + ecosystem DeFi/NFT projects)
• Polkadot ETF (DOT + parachain assets)
• Litecoin ETF (LTC as a PoW asset)
• Dogecoin ETF (DOGE as a mainstream meme asset)

Risks:
Public chain ETFs face risks primarily related to technical scalability, ecosystem competitiveness, and regulatory challenges. Although such ETFs help drive ecosystem project growth and improve capital operations, differences in technological innovation and market competition among various public chains may impact their long-term performance.

As the crypto industry integrates further with traditional markets, public chain projects will also encounter increasing regulatory pressures, especially concerning cross-border capital flows and compliance issues. Additionally, market uncertainty could lead to high volatility in public chain ecosystem ETFs.

Implementation Challenges:

• Technical Scalability Issues: Different public chains vary significantly in their technological development. The competitiveness and innovation capacity of each ecosystem are inconsistent, which may affect the ETF’s long-term performance.

3. DeFi Blue-Chip ETF

Investing in leading protocols within the DeFi sector, offering high-growth financial products.

Potential Impact:

• Increases capital inflows into the DeFi sector, driving liquidity growth.
• Enhances mainstream recognition of DeFi, reducing regulatory risks associated with decentralized finance.
• Expands institutional hedging tools and promotes the use of financial derivatives.

Possible Components:

• DEX Sector: Uniswap (UNI), Curve (CRV), Balancer (BAL)
• Lending Sector: Aave (AAVE), Compound (COMP)
• Staking Sector: Lido (LDO), Rocket Pool (RPL)

Risks:
DeFi blue-chip ETFs face risks mainly related to regulatory uncertainty, liquidity issues, protocol security, and technical vulnerabilities in decentralized platforms. While leading DeFi protocols have high growth potential, the lack of a unified regulatory framework and compliance standards may pose regulatory risks.

Additionally, insufficient market liquidity could impact ETF performance, while smart contract vulnerabilities or hacker attacks on decentralized finance platforms may lead to investment losses. Despite these risks, DeFi blue-chip ETFs can help attract more capital, enhance DeFi’s market recognition, and expand institutional hedging tools.

Implementation Challenges:

• Protocol Security: Smart contract vulnerabilities or hacker attacks on decentralized platforms could result in fund losses, undermining investor confidence.

4. RWA (Real World Asset) Tokenization ETF

Investing in tokenized real-world assets (RWA), such as bonds, real estate, and artwork.

Market Status:

• Institutions like BlackRock and Franklin Templeton have already entered the RWA sector.
• The tokenization of U.S. Treasury bonds has been adopted by multiple institutions (e.g., Ondo Finance, Maple Finance).

Potential Impact:

• Integrates traditional finance with blockchain, expanding institutional investment opportunities.
• Enhances asset liquidity and promotes RWA adoption in the DeFi sector.
• Higher regulatory compliance reduces policy uncertainty risks.

Possible Components:

• Tokenized Treasury ETF (e.g., US Treasury Tokenized ETF)
• Real Estate Tokenization ETF (e.g., Propy, Lofty AI asset pools)
• Art/Collectibles ETF (e.g., Tokenized NFT collectibles)

Source: https://app.rwa.xyz/treasuries

Risks:
RWA tokenization ETFs face numerous legal and compliance challenges, particularly in cross-border tokenization, where regulatory inconsistencies across jurisdictions significantly increase operational complexity. Ensuring the authenticity and custody of assets is crucial, as the legitimacy and verifiability of tokenized assets form the foundation of this investment model.

Furthermore, tokenized assets may be classified as securities, requiring compliance with strict securities regulations. Additionally, differences in global tax policies could introduce complex tax compliance risks.

Implementation Challenges:

• Asset Authenticity and Custody: Ensuring the legitimacy and authenticity of tokenized assets is the primary challenge in implementing this ETF.

5. AI + Crypto ETF

Investing in artificial intelligence (AI)-related crypto projects, including AI algorithms, AI agents, AI-generated content (AIGC), and other sectors.

Market Status:
The year 2024 has seen a booming AI sector, with multiple AI projects experiencing significant market cap growth.
The potential of AI combined with blockchain is immense, such as decentralized AI computing platforms and AI-generated NFTs.

Potential Impact:
Pushing forward the integration of AI and blockchain, accelerating AI development in the Web3 era.
Attracting venture capital, speeding up capital inflows into the AI sector.
Promoting the development of a decentralized AI ecosystem, reducing monopolization by large corporations.

Possible Components:
AI Computing: Render Network (RNDR), Akash Network (AKT)
AI Agents: Fetch.ai (FET), SingularityNET (AGIX)
AI NFT: Alethea AI, Altered State Machine (ASM)

Source: https://rendernetwork.com/

Risks:
AI and blockchain-integrated ETFs face challenges in technical integration, data privacy, and security, especially in coordinating smart contracts and distributed computing. Additionally, computational bottlenecks and the pressure from decentralized architecture increase implementation difficulty.

Implementation Challenges:
The valuation controversy in the AI and crypto sectors stems from the difficulty of technology assessment, market bubbles, and regulatory uncertainty. Immature technology and frequent policy changes make valuations highly susceptible to short-term fluctuations.
Balancing privacy protection and transparency remains a key challenge in sensitive industries like finance and healthcare. Moreover, market trust in this integration is relatively low, leading to significant investor concerns.

6. Bitcoin Mining Companies ETF

Investing in major Bitcoin mining companies worldwide, highly influenced by BTC price cycles.

Market Status:
Existing mining companies such as Hut 8, Marathon Digital, and Riot Blockchain are already publicly listed.
After BTC halving, mining companies’ profitability will become a key investment factor.

Potential Impact:
Enhancing the financing capability of mining companies, driving industry expansion.
Providing an opportunity to invest in the Bitcoin industry chain while reducing direct holding risks.
Strengthening institutional influence on BTC price cycles, increasing long-term investment value.

Possible Components: Hut 8 (HUT), Marathon Digital (MARA), Riot Blockchain (RIOT), CleanSpark (CLSK)

Source: https://www.mara.com/

Risks:
Bitcoin mining company ETFs face multiple risks, primarily including market instability caused by BTC price fluctuations, regulatory differences and changes across various countries and regions, the impact of mining hardware technology and energy costs on mining company competitiveness, potential environmental regulations restricting mining activities, and operational and technical issues within mining firms. These risks may affect ETF investment returns, so investors need to carefully assess the potential and challenges of mining company ETFs.

Implementation Challenges:
Mining Technology and Environmental Regulations: Advancements in mining technology, fluctuations in energy costs, and increasingly stringent environmental regulations may restrict mining activities, thereby impacting the performance of mining company ETFs.

Positive Impact on the Market

1. Capital Inflows and Increased Market Liquidity

The approval of ETFs means that more institutional investors and traditional capital can enter the cryptocurrency market in a more convenient and low-barrier manner, without the need to hold private keys or use exchange accounts. This significantly lowers compliance and technical thresholds, attracting a large influx of traditional financial capital.

For example, after the approval of the Bitcoin spot ETF, iShares Bitcoin Trust (IBIT) attracted over $10 billion in funds within six weeks, driving BTC prices up by approximately 50%. If ETFs for other cryptocurrencies such as SOL, XRP, and LTC are approved, similar capital inflows are expected, pushing prices higher.

Source: https://finance.yahoo.com/news/blackrocks-ibit-hits-10b-faster-225127180.html

2. Improved Market Sentiment and Bull Market Catalyst

The approval of ETFs is often interpreted by the market as a sign of mainstream recognition for cryptocurrencies, boosting investor confidence. For example, after the Bitcoin spot ETF was approved in January 2024, Bitcoin quickly surged past $48,000, triggering short-term FOMO (fear of missing out) sentiment.

If SOL or XRP spot ETFs are approved, the market may view them as new milestones in industry development, driving overall market growth, particularly benefiting Layer 1 ecosystems and payment-related tokens.

3. Regulatory Signals Impacting Market Expectations

The SEC’s approval of an ETF application may indicate a more relaxed regulatory stance on the crypto asset. For instance, the SEC’s acceptance of Grayscale’s Solana ETF application was interpreted by the market as a sign that Solana might not be classified as a security, reducing the risk of regulatory crackdowns.

If an XRP ETF is approved, the market may perceive it as a sign that the SEC is softening its stance on XRP’s classification as a security, thereby boosting the development of the XRP ecosystem.

4. Long-Term Impact: Market Maturity and Institutionalization

Spot ETFs enable institutional investors to enter the market at a low cost and transparently, helping to reduce the crypto market’s “casino-like” nature and fostering its evolution into a mainstream asset class. Following the approval of Bitcoin ETFs, the entry of giants like BlackRock and Fidelity has enhanced market professionalism and institutional participation.

As more cryptocurrency ETFs gain approval, broader institutional adoption is expected, driving the development of more sophisticated investment strategies such as arbitrage, futures hedging, and fixed-income strategies, further enhancing market stability.

Risks

While the approval of cryptocurrency ETFs brings institutional capital inflows and market maturation, it also comes with certain risks, including:

1. Increased Market Concentration
   ETFs are operated by large asset management firms, which may lead to liquidity and pricing power being concentrated in a few institutions, weakening the decentralized nature of the market.

2. Regulatory Uncertainty
   Although ETFs have been approved, the regulatory environment remains in flux. Future policy changes (such as taxation and compliance requirements) could impact market expectations.

3. Heightened Systemic Risk
   ETFs allow more institutional investors to enter the market, but during macroeconomic downturns, they may exacerbate panic selling, amplifying price volatility.

4. Potential Impact on the Spot Market
   ETFs primarily rely on custodians to hold BTC and other assets. If custody mechanisms lack transparency or face management issues, investor confidence could be affected, potentially triggering a liquidity crisis.

5. Arbitrage Trading Risks
   ETF prices may deviate from the spot market, and the complexity of arbitrage trading could lead to short-term market turbulence, potentially impacting overall market stability.

Conclusion

Cryptocurrency ETFs are becoming a focal point of market attention, with multiple crypto asset ETF applications currently under review by the U.S. SEC. Although the approval process remains slow, the newly elected government and the SEC may adopt a more open stance on cryptocurrencies following U.S. President Donald Trump’s announcement of a cryptocurrency task force. By October 2025, the SEC is expected to make decisions on several crypto ETF applications, which could profoundly impact market trends.

The launch of crypto ETFs provides institutional investors with a new entry channel into the crypto market and accelerates the integration of crypto assets with traditional finance. In the future, more types of crypto ETFs may emerge, including staking-based products and innovative ETFs covering DeFi and AI, further driving industry growth.

However, the market must remain cautious about potential risks, such as increasing centralization, regulatory changes, and heightened market volatility.