Which Cryptocurrency Spot ETFs May Be Approved? Predictions for Future Market Trends!

TradingKey — In the past two years, the U.S. SEC has approved spot ETFs for Bitcoin and Ethereum. Along with the implementation of crypto-friendly policies with Trump’s second term, this has lead to a surge in the market value of cryptocurrency spot ETFs and rapid global expansion.

We’ll provide our analysis of the benefits of cryptocurrency spot ETFs, potential new approvals, and future development trends.

Current Status of Cryptocurrency Spot ETFs

Many countries or regions have launched cryptocurrency spot ETFs, including the U.S., Canada, Germany, Brazil, Australia, Bermuda, Jersey, Switzerland, Liechtenstein, Guernsey, and Hong Kong, among others. However, most of these countries primarily focus on Bitcoin and Ethereum. Some countries, like Brazil, have even introduced spot ETFs for other altcoins, such as SOL and XRP.

As the main trading market for cryptocurrency spot ETFs, the U.S. has launched spot ETFs for Bitcoin and Ethereum, with total assets under management showing an upward trend, exceeding $120 billion. According to Coinglass data, as of February 24, the total market value of 11 Bitcoin spot ETFs in the U.S. reached $114.1 billion, while 9 Ethereum spot ETFs totaled around $10 billion.

Canada was an early developer in this field, launching Bitcoin and Ethereum spot ETFs back in 2021, such as Purpose BTC ETF, 3iQ CoinShares BTC ETF, CI Galaxy Bitcoin ETF (TSX: BTCX.B), and Evolve Ethereum ETF (TSX: ETHR). However, their size and activity level still lag behind that of the U.S.

Hong Kong, as one of the more active cryptocurrency trading markets in Asia, has followed the U.S. in launching Bitcoin and Ethereum spot ETFs, but with significant differences. Current data shows total assets under management of approximately $400 million for Bitcoin spot ETFs and around $50 million for Ethereum spot ETFs.

Which Cryptocurrencies Have Applied for Spot ETFs?

In January and May 2024, the U.S. Securities and Exchange Commission (SEC) approved spot ETFs for Bitcoin and Ethereum, attracting a large influx of U.S. stock investors and driving up the prices of these cryptocurrencies.

Following this, asset management firms like Grayscale, Bitwise, VanEck, 21Shares, and Canary Funds submitted applications to the SEC for spot ETFs for other altcoins, including SOL, DOGE, XRP, LTC, TRUMP, BONK, and others. The details are as follows:

Compilation of virtual currencies that have submitted applications to the SEC, Source: TradingKey 

Which Cryptocurrency Spot ETFs Might the SEC Approve?

With the departure of former SEC Chairman Gary Gensler and the appointment of new SEC Chairman Paul Atkins, investors have shifted from pessimism to optimism regarding the prospects of altcoin spot ETFs. However, there are still disagreements on more specific issues, such as which cryptocurrency spot ETFs the SEC will approve and when.

According to the latest data from the prediction platform Polymarket, the LTC spot ETF is most likely to be approved this year, with a probability of 90%. Following this are XRP, DOGE, and ADA, with probabilities of 80%, 75%, and 52%, respectively.

Bloomberg analysts James Seyffart and Eric Balchunas also believe LTC has the highest approval rate, as the SEC classifies LTC as a Bitcoin fork and designates it as a commodity. The approval rates for DOGE, SOL, and XRP are estimated at 75%, 70%, and 65%, respectively.

Cryptocurrency analyst Kare believes ADA may be approved faster than SOL due to Cardano's favorable relationship with the SEC.

Framework co-founder Vance Spencer predicts that plans for the listing of ETFs for cryptocurrencies other than Bitcoin and Ethereum will be delayed until 2026.

Future Development Trends for Cryptocurrency Spot ETFs

Unlike the Biden administration's crackdown on cryptocurrencies, Trump 2.0 aims to make the U.S. a global cryptocurrency hub and is fostering a more friendly regulatory environment by appointing crypto-friendly individuals to key government positions, including the SEC and the Treasury Department. As a result, cryptocurrency spot ETFs are experiencing explosive growth in the U.S., a trend expected to continue, attracting more institutions to issue ETFs based on various cryptocurrencies, although liquidity will still be concentrated in Bitcoin-related products.

While the U.S. currently leads the development of cryptocurrency ETFs, other financially advanced countries and regions, such as the UK, Germany, Brazil, Hong Kong, and Japan, are also joining this trend. As the field matures, developing countries are likely to follow suit, but the trend of "U.S. dominance with global followers" is unlikely to change.

From the current market perspective, the market size for cryptocurrency spot ETFs is expected to continue growing rapidly. Bloomberg industry research predicts that by the end of 2025, the allocation of institutional investors to cryptocurrencies will increase from the current 3% to 5%. Additionally, experts anticipate that the total assets under management for global cryptocurrency ETFs will exceed $300 billion by the end of 2026.