At the start of January 2024, the asset-management industry eagerly awaited the debut of U.S. spot bitcoin exchange-traded funds (ETFs), with expectations of attracting up to $30 billion in their first year. Fast forward, and the result has far exceeded those projections.
The initial wave of bitcoin ETFs has raised an impressive $65 billion in 2024, fueling a surge in bitcoin’s price from $43,000 to over $100,000. Among the top performers, BlackRock’s iShares Bitcoin Trust has become the most successful ETF debut in the 35-year history of the industry.
Read more: Hong Kong Approves Four Cryptocurrency Exchanges to Strengthen Digital Asset Market
Yet, cryptocurrency enthusiasts believe this is just the beginning. On January 10, the anniversary of these products’ launch, President-elect Donald Trump will take office for his second term. He is seen as a crypto supporter, which has sparked optimism for a new golden era in digital assets.
New applications for crypto products are already flooding regulators’ inboxes, as many industry players anticipate a friendlier regulatory environment under the new administration. Joe McCann, founder of Asymmetric, highlights that the industry’s awareness of the potential profits, coupled with a more crypto-friendly government, is prompting companies to submit their best ideas.
Gary Gensler, the Biden-appointed SEC chair, approved the first spot bitcoin ETFs and ethereum products after losing a court challenge, though he continues to caution about the volatility and risks associated with cryptocurrencies. Trump’s SEC nominee, Paul Atkins, is seen as a proponent of digital assets, fueling further optimism.
By late November, companies like VanEck, 21Shares, and Canary Capital had filed multiple applications for new crypto-focused ETFs, targeting indices or tokens such as Solana and Ripple’s XRP, among others. The filings are a reflection of the industry’s belief that, regardless of the election result, the regulatory climate would improve, encouraging innovation.
In addition to individual coin products, new derivative ETFs tied to bitcoin and other assets are set to debut soon. Several issuers, including Calamos Investments and Innovator ETFs, have filed for funds that aim to shield investors from bitcoin’s volatility. These new ETFs are expected to launch on January 22.
The SEC’s approval of bitcoin ETF options and CBOE’s green light for the Cboe Bitcoin U.S. ETF Index have paved the way for these products. Federico Brokate of 21Shares predicts that the U.S. will see further product innovation, such as funds that track baskets of cryptocurrencies or combine assets like bitcoin and gold.
However, these novel products remain speculative. While bitcoin ETFs have been successful, products tied to ether, the second-largest cryptocurrency, have seen more modest success, attracting just $12.8 billion. This slower growth reflects the fact that altcoins are still developing, and factors influencing their returns and volatility are unclear.
Despite this, the U.S. crypto market remains optimistic. Todd Sohn of Strategas notes that bitcoin and ethereum are the only cryptocurrencies with established futures markets, which boosts regulatory confidence. However, it’s uncertain how quickly Trump’s SEC chair will embrace the more innovative products, considering the ongoing debate over whether these tokens fall under the SEC’s jurisdiction.
Still, the crypto asset-management sector remains enthusiastic. As VanEck’s Matthew Sigel puts it, the only limit to the creation of new products is human creativity.
