2024 Spot ETF Report Card: Created $40 billion Market in One Year

2024 is a milestone year for the cryptocurrency market. After nearly a decade of waiting, the U.S. Bitcoin Spot ETF was finally approved for listing on January 11, achieving a trading volume of $4.6 billion and a net inflow of $628 million on its first day. This breakthrough subsequently triggered a chain reaction globally, with several countries and regions such as Hong Kong and Australia launching Bitcoin Spot ETFs in succession, further promoting the legitimization of crypto assets. As of now, the asset size of U.S. crypto ETFs has reached $122.39 billion, while Hong Kong has reached $46.7 million.

2024 marks the official entry of encryption assets into the mainstream investment arena. The latest 13-F filings show that various institutional investors have become holders of encryption ETFs, including endowment funds, pension funds, hedge funds, investment advisors, and family offices. In this wave of mainstreaming encryption assets, ETFs for other digital assets such as Solana and XRP are also gradually coming into the public eye, laying the foundation for development in 2025.

This article will review the key milestones of the 2024 encryption Spot ETF, analyze the market performance of encryption ETFs over the past year, and look forward to the development prospects of encryption ETFs in 2025.

Key Milestones Review: The Year of the Birth of the Encryption Spot ETF

Bitcoin Spot ETF 2024 timeline

In the early hours of January 11, 2024, global investors held their breath as the U.S. Bitcoin Spot ETF was finally approved, fulfilling the industry's long-held expectations.

On the first day, the trading volume exceeded 4.6 billion USD, with a net inflow of 628 million USD. In just three days since its listing, the trading volume has approached 10 billion USD.

On January 19, one week after trading, the assets under management of the U.S. Bitcoin ETF surpassed that of the silver ETF, becoming the second largest ETF commodity category in the U.S.

On April 15, Hong Kong approved the Spot ETFs for BTC and ETH in principle. On April 24, the Bitcoin Spot ETF and the Ethereum Spot ETF were officially approved in Hong Kong. On April 30, 6 virtual asset Spot ETFs were listed on the Hong Kong Stock Exchange and opened for trading.

The first day fundraising scale of the Hong Kong Spot encryption currency ETF is approximately 2 billion HKD, with a net asset value of 293 million USD. The total trading volume of the 6 ETFs on the first day is approximately 87.58 million HKD ( 12.7 million USD ).

The launch of the Hong Kong cryptocurrency Spot ETF has a profound impact on the financial landscape of the Chinese community, and it is also an important step towards the further legalization of cryptocurrency worldwide. The Hong Kong crypto ETF adopts a physical redemption mechanism, providing a channel for converting cryptocurrency assets into traditional financial assets.

Subsequently, various countries also began to approve and trade Bitcoin Spot ETFs. On June 4, Australia's first Bitcoin Spot ETF officially started trading, and the Thai Securities Commission also approved the local first Bitcoin Spot ETF.

On September 23, the US SEC approved the listing of a certain company's Bitcoin ETF options on Nasdaq. On October 19, the SEC approved trading for multiple Spot Bitcoin ETF options. The range of Bitcoin-related derivatives has been further expanded, bringing to the market options products that combine compliance and trading depth. Bitcoin ETF options allow investors to make duration-based portfolio allocations, especially suitable for long-term investments, injecting more compliance and trading depth into the market.

Ethereum Spot ETF 2024 timeline

In 2024, Ethereum Spot ETF is experiencing a series of important advancements globally. From Hong Kong to the United States and then to Australia, multiple regions are actively promoting the approval and listing of Ethereum Spot ETF. Ethereum, as the "Dragon Two" of the encryption market, is officially moving towards traditional investors.

On April 24, the Hong Kong Bitcoin Spot ETF and Ethereum Spot ETF were officially approved, marking the first landing of an Ethereum Spot ETF on a major exchange. On its first day, the Hong Kong Ethereum Spot ETF saw a net inflow of 14,200 ETH, with a trading volume of 2.99 million USD.

On May 24, the U.S. SEC approved the 19b-4 filing for the first Spot Ethereum ETF. This is a key step for the legal trading of Spot Ethereum ETFs in the U.S. market, opening the door for Spot Ethereum products to officially enter the U.S. market.

On July 23, the encryption market迎来了历史性时刻, as the US SEC officially approved the Ethereum Spot ETF. The first day trading volume of the Ethereum Spot ETF exceeded 1.019 billion USD, with a net inflow of 106.6 million USD.

On November 8, the U.S. SEC once again postponed its decision on the listing of Spot Ethereum ETF options on the New York Stock Exchange. The document states that the delay is intended to allow for further analysis and to gather public opinion, particularly regarding whether the proposed rule changes meet the requirements of the Securities Exchange Act.

Other encryption-related ETFs 2024 timeline

After the approval of the Bitcoin and Ethereum Spot ETFs, the Solana Spot ETF also underwent a series of significant advancements in 2024. On June 20, the first North American Solana Spot ETF application was submitted, marking Solana ETF's official entry into the public eye. Subsequently, multiple companies also submitted applications for the Solana ETF to the SEC.

On August 8, the Brazilian Securities Commission approved the world's first Solana Spot ETF, and on August 21, Brazil approved the second Solana ETF. This is a groundbreaking step for Brazil, bringing more optimism to encryption supporters.

The application for the Solana Spot ETF in the United States is still ongoing. On November 22, a certain exchange submitted four Solana Spot ETF listing applications to the SEC. On December 4, a certain company sought to convert its Solana trust fund into a Spot ETF and list it on the NYSE. However, shortly thereafter, sources revealed that the SEC had notified at least two institutions that applied for the Solana Spot ETF that their submitted 19b-4 documents would be rejected. This indicates that the United States still maintains a cautious attitude towards the Solana Spot ETF.

In addition to Solana, XRP is also a key focus for institutions. Currently, several companies have submitted applications for an XRP Spot ETF in the United States.

In addition, various types of encryption-related ETFs are being launched or entering the application stage in November and December, ranging from single encryption assets to multi-asset portfolios, from index-based to income-based. This trend marks the gradual mainstreaming of the encryption market and also demonstrates its further integration with the traditional financial system. Encryption assets are gradually evolving into one of the core assets recognized by global investors.

How has the ETF data performed this year?

The total assets managed by ETFs listed in the United States exceed $10 trillion, with $40 billion invested in the encryption field. Encryption ETFs currently account for 0.4% of the overall ETF market. However, according to data from a research institution, the net inflow of Bitcoin Spot ETFs in 2024 will account for 3.5% of all net inflows into U.S. ETFs in 2024, a figure that is significantly higher than that of traditional asset classes.

Since the launch of Bitcoin ETF, its liquidity rate is 4.5 times that of the inflation-adjusted gold ETF liquidity rate. Although the cumulative flow still lags behind gold, the assets under management of Bitcoin ETF in the United States have exceeded that of gold.

Moreover, the BTC holdings of the U.S. Bitcoin Spot ETF have exceeded 1.13 million coins, surpassing Satoshi Nakamoto's Bitcoin holdings, making it the world's largest "Bitcoin holder". These achievements undoubtedly demonstrate that the Bitcoin Spot ETF is the "most successful" ETF in history.

As of December 24, the cumulative net inflow of Bitcoin Spot ETF in the United States reached $35.49 billion, with a total net asset value of $110 billion. Among them, a certain company's ETF accounts for nearly 50% of the asset value, reaching $53.7 billion. It is worth noting that the asset scale of this ETF is equivalent to the sum of 50 ETFs focused on Europe ( region + single country ), while these European ETFs have existed for 20 years.

The Ethereum Spot ETF in the United States previously performed modestly, but since November, its inflows and liquidity have significantly increased.

On November 13, a certain ETF issuer announced the acquisition of an Ethereum staking service provider. On November 20, another company announced the addition of staking functionality to its Ethereum core ETP product and renamed it "Ethereum Core Staking ETP". With the news of Trump's victory, market expectations for the introduction of staking functionality in the Ethereum Spot ETF have become increasingly strong.

As of December 24, the cumulative total net inflow of Ethereum Spot ETF in the United States has reached $2.51 billion, with a total net asset value of $12.35 billion. On December 5, the net inflow amounted to $428 million, setting a historical record.

In the United States, the Ethereum Spot ETF with the highest net asset value is from a certain company, reaching $4.91 billion, followed by another company's ETF with a net asset value of $3.65 billion. Together, they account for 69.3% of the total assets of Ethereum Spot ETFs in the United States.

Outlook on Cryptocurrency ETF Approval in 2025

Multiple Solana ETF applications will face their first review deadline from January 23 to 25, 2025. However, according to a reporter from a certain media outlet, the U.S. Securities and Exchange Commission has notified at least two applicants for SOL Spot ETFs that their submitted 19b-4 filings will be rejected. At the same time, insiders have revealed that under the current administration, the SEC may not approve any new encryption ETF applications.

An ETF analyst expects that the issuer will re-submit the application after the new SEC chairman takes office. The new chairman serves as co-chair of a digital chamber, dedicated to researching and promoting the development of the digital asset industry. His appointment may bring new possibilities for the approval of the Solana ETF.

The first review deadline for 10 encryption currency index ETFs submitted by a certain company to the SEC is on January 18, 2025. This ETF includes various mainstream encryption assets currently in the market, including BTC, XRP, Solana, Cardano, and other encryption currencies.

The company's Bitcoin and Ethereum ETF will face its first review deadline on January 30, 2025. This ETF is a proposed Spot encryption cryptocurrency index fund composed of BTC and ETH, aimed at "providing investors with a way to balance their investments in the two largest encryption assets globally in an easily accessible format."

In addition, the following encryption ETFs are also awaiting approval:

XRP ETF:

• Multiple companies' XRP ETF

Litecoin ETF:

• A certain company's Litecoin ETF

HBAR ETF:

• A company's HBAR ETF

In addition to the ETF, the approval of Ethereum Spot ETF options will also take place in 2025. An ETF analyst stated that the SEC's final decision may be made around April 9, 2025. However, the SEC is not the only decision-making body; approval from the OCC and CFTC is also required.

2025 Outlook

In 2025, more encryption assets are expected to enter the ETF field. Although regulatory challenges still exist, the continued participation of institutional investors and the gradual maturation of the market will provide more momentum for the future development of the cryptocurrency industry. We can foresee that encryption assets will no longer be just speculative tools, but will become an important component of global portfolios, promoting the deep integration of traditional finance and digital assets.

The following are predictions from industry institutions and KOLs regarding the development of encryption ETFs in 2025:

A certain media predicts: Staking will first be integrated into the Ethereum ETF in 2025. Other encryption currencies ( such as Solana )'s ETF will be launched soon, and there may be a weighted encryption index ETF launch.

A certain investment institution, Lianchuang, predicts that the listing plans for other encryption currency ETFs, apart from Bitcoin and Ethereum, will be delayed until 2026.

A research institution predicts that the inflow of ETFs will continue to increase in 2025, especially as a certain company's ETF shifts to positive net inflow. The launch of a Spot Solana ETF in the next year or two seems inevitable.

A certain exchange stated: Looking ahead, the industry's focus is on the possibility that issuers may expand the asset scope of ETFs to include more tokens like XRP, SOL, LTC, and HBAR, but we believe that these potential approvals may only benefit a limited group of assets.

An ETF issuer predicts: the new SEC leadership ( or possibly the CFTC ) will approve multiple new Spot encryption currency transactions in the US.