2025 Retrospective: Bitcoin and Ethereum ETFs Thrive as XRP and Other Cryptos Join the Party

Source: PortaldoBitcoin Original Title: Retrospectiva 2025: ETFs de Bitcoin e Ethereum prosperam enquanto XRP e outras criptos entram na festa Original Link: https://portaldobitcoin.uol.com.br/retrospectiva-2025-etfs-de-bitcoin-e-ethereum-prosperam-enquanto-xrp-e-outras-criptos-entram-na-festa/ This year, (exchange-traded funds) opened many doors for cryptocurrencies on Wall Street as the SEC (U.S. Securities and Exchange Commission) adopted a new approach to these products.

Although asset managers fought tooth and nail to offer products tracking the spot prices of Bitcoin and Ethereum, many predicted opportunities in 2025 with the regulatory environment changing.

Growth of Bitcoin and Ethereum ETFs

By December 15, the spot Bitcoin ETFs had generated US$ 57.7 billion in net inflows since their historic debut in January 2024. This represented a 59% increase compared to the US$ 36.2 billion at the start of the year. But inflows were not steady.

Investors injected US$ 1.2 billion into spot Bitcoin ETFs on October 6, when the asset approached its all-time high above US$ 126,000. When Bitcoin’s price fell below US$ 90,000 on November 11, investors withdrew US$ 900 million from the funds.

Still, this was only the second worst day ever for spot Bitcoin ETFs: when Bitcoin plummeted in February due to trade and inflation fears, these products recorded outflows of US$ 1 billion.

Since their debut last July, Ethereum spot ETFs have generated net inflows of US$ 12.6 billion through December 15. When the cryptocurrency surged near its all-time high of nearly US$ 4,950 in August, these products saw inflows of US$ 1 billion in a single day.

With signs of increasing adoption among financial institutions, these products have largely operated behind the scenes, while observers focused on the prospect of more ETFs that could boost digital asset prices or expand access to new investors.

Opening options

When the SEC approved generic listing standards for commodity-backed investment funds in September, the regulator acted to meet an expectation that had been building for months.

The pile of ETF applications covering a wide range of digital assets had grown considerably, with approvals depending on a response that the previous SEC management had been avoiding for years: when should a digital asset be treated as a commodity?

Instead of being forced to make case-by-case decisions about the eligibility of various cryptocurrencies, the SEC set criteria for exchanges that made digital assets suitable for commodity-backed investment funds.

Among the most important factors, the standards require that the underlying digital assets of the ETFs be traded on monitored markets, have a six-month trading history of futures, or already back a ETF with significant exposure.

The approval of generic listing standards should significantly expand the number of products available to investors, but asset managers are still awaiting responses on at least 126 ETFs. These requests focus on tokens from promising decentralized finance (DeFi) projects, as well as relatively new meme coins.

XRP and Solana enter the market

First came Bitcoin, then Ethereum. Now, investors in the US have access to ETFs tracking the spot prices of XRP and Solana, among others.

As the fifth and seventh largest digital assets by market cap, respectively, XRP and Solana faced regulatory hurdles during the previous administration, which dissipated on their way to becoming underlying assets for various products.

Last year’s launch of spot Bitcoin ETFs triggered a demand wave that pushed the asset’s price to new highs. While the same cannot yet be said for smaller cryptocurrencies, products dedicated solely to XRP and Solana still generated notable activity.

Solana spot ETFs generated US$ 92 million in net inflows since launch through December 15. XRP spot ETFs, which debuted in the same month, generated approximately US$ 883 million in net inflows since trading began.

The launch of Solana ETFs was notable for another reason: they were among the first ETFs to share a portion of their staking rewards with investors, a development reinforced by new guidelines issued last month by the US Department of the Treasury and the IRS.

Index ETFs gain prominence

Many professional investors appreciate how the holdings of these funds change over time, providing them with relative peace of mind. The index approach allows investors to gain broad exposure to the market’s growth potential without needing detailed knowledge of each individual asset.

In February, Hashdex launched the first spot market ETF that replicates multiple digital assets in the US, with the debut of the Hashdex Nasdaq Crypto Index ETF. Inspired by the Nasdaq Crypto Index, the ETF holds Cardano, Chainlink, and Stellar, among other larger cryptocurrencies.

Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares launched similar products, although some seek exposure to digital assets through derivatives. Overall, the group of index ETFs offers exposure to 19 digital assets.

Entry of institutional investors

Although some US pension funds have purchased spot Bitcoin ETFs, the Wisconsin Investment Board liquidated US$ 300 million in holdings around February.

On the other hand, Al Warda Investments disclosed a US$ 500 million position in the spot Bitcoin ETF in November. Mubadala disclosed a position in the product valued at US$ 567 million. Almost simultaneously, it was revealed that Harvard’s endowment fund held shares of the ETF worth US$ 433 million.

Brown University and Emory University also disclosed positions in Bitcoin spot ETFs this year, emerging as pioneers in institutional adoption of the asset.

Overall, analysts say this shift in investor profile could lead to lower Bitcoin volatility and less severe losses. This shift from retail to institutional sector is very positive for the long-term sustainability of the asset class because now we have investors with much longer investment horizons.