## 2025 Cryptocurrency ETF Market Breakthrough: BTC and ETH Lead, Emerging Coins Like XRP Follow Suit

Since its launch in January 2024, the spot Bitcoin ETF has attracted a net inflow of $57.5 billion, compared to $36.2 billion at the beginning of the year, representing a 59% increase. However, this investment boom has not been smooth sailing—fund flows exhibit clear cyclical characteristics. On-chain data shows that when Bitcoin's price approaches a historical high of $126,080, investors rush in, with a single-day net inflow of $1.2 billion; conversely, when the price drops below $90,000, $900 million is hurriedly withdrawn. This reflects market participants' cautious attitude amid macroeconomic fluctuations.

Ethereum's spot ETF performance is equally noteworthy. Since its launch in July last year, it has accumulated a net inflow of $12.6 billion. When Ethereum's price surged to a new all-time high of $4,950 in August this year, daily capital inflows broke through the $1 billion mark. These figures indicate that institutional investors' confidence in mainstream crypto assets is gradually strengthening.

## Turning Point in Regulatory Framework: SEC's New Standards Open Doors for Opportunities

In September this year, the U.S. Securities and Exchange Commission (SEC) approved general standards for commodity trust trading, marking a watershed moment for the crypto ETF market. The new regulations no longer require SEC approval on a case-by-case basis; instead, exchanges evaluate whether digital assets meet the criteria for commodity trusts based on unified standards. Key requirements include: the relevant digital assets must be traded on regulated markets, have at least six months of futures trading history, or have existing ETF products with substantial assets.

Bloomberg senior ETF analyst Eric Balchunas stated that this policy change means dozens of cryptocurrencies could be rapidly approved for ETF launches. Currently, over 126 crypto ETF applications are awaiting approval, most focusing on emerging decentralized finance projects and new meme coins.

## New Entrants: XRP and Solana ETFs Make Their Debut

After Bitcoin and Ethereum, U.S. investors can now directly hold XRP and Solana through ETFs. These two projects rank fifth and seventh in market capitalization and have faced regulatory challenges during the Biden administration but are now experiencing a "turning point."

Since the Solana spot ETF launched in November, it has recorded a net inflow of $92 million. More notably, this product innovatively shares part of staking rewards with investors—new guidelines issued by the U.S. Department of the Treasury and the IRS in October further support this model. Meanwhile, the XRP spot ETF attracted approximately $883 million in funds during the same period.

Juan Leon, senior investment strategist at Bitwise, believes that although the launch of XRP and Solana ETFs coincides with a phase of market adjustment, their performance has exceeded expectations, fully demonstrating genuine demand for crypto assets beyond Bitcoin and Ethereum. Leon commented that the cohesion and engagement of these two ecosystems are impressive, "which is a positive signal for their development in 2026."

The Dogecoin spot ETF has also appeared, with a total net inflow of $20,000.

## Index Funds Emerge: A New Choice for Professional Investors

Gerry O'Shea, head of global market insights at Hashdex Asset Management, sees 2025 as a pivotal year marking a fundamental shift in how professional investors and hedge funds view crypto ETFs. Over the past year, many advisors and institutional investors were still in the preliminary research phase, but now they are preparing to seriously allocate assets in this category.

Vanguard recently announced that it will allow its 50 million clients to trade certain spot crypto ETFs on brokerage platforms, and Bank of America has approved limited crypto exposure for private wealth clients. "A year ago, there was significant regulatory uncertainty," O'Shea noted, "but now the question is no longer 'whether to invest,' but 'how to invest.'"

This shift has made ETF products tracking crypto asset indices a new focus. The flexibility of these funds gives institutional investors confidence—they can participate in market growth potential through index ETFs without needing to understand every asset in detail. Hashdex launched its first U.S. multi-asset crypto index ETF in February this year, tracking the Nasdaq Crypto Index, which includes assets like Cardano, Chainlink, Stellar, and others. Franklin Templeton, Grayscale, Bitwise, 21Shares, and CoinShares have also launched similar products, some employing derivatives strategies. Existing index ETFs provide exposure to 19 digital assets.

## Institutional Flood: Large Capital Inflows Reshape Market Dynamics

Although a few U.S. pension funds remain cautious—Wisconsin Investment Board liquidated $300 million worth of Bitcoin ETF holdings in February—overall trends clearly point to large-scale institutional capital entering the market.

In November, Abu Dhabi-based Al Warda Investments disclosed holdings of $500 million in BlackRock's spot Bitcoin ETF, with its parent company Mubadala Investment Company having announced a similar position worth $567 million in February. Harvard University's endowment fund also publicly disclosed a $433 million ETF holding. Brown University and Emory University announced their first direct investments in spot Bitcoin ETFs this year.

This shift from retail to institutional participation is widely seen as a positive signal within the industry. Gerry O'Shea stated, "While the change isn't radical, it's definitely noteworthy. The longer investment cycles and more stable capital characteristics of institutional investors should help reduce volatility in assets like Bitcoin, supporting their long-term sustainable development." This broadening of participation lays a more solid foundation for the future growth of crypto assets.