Published: January 29th, 2025
Crypto traders scored two major wins last year when leading fund managers won their longstanding battles with the SEC to launch spot Bitcoin (and later Ethereum) exchange-traded funds (ETFs). Based on the take up seen since, ETF issuers are keen to test new waters.
Several issuers have proposed new spot ETFs that track the prices of altcoins and meme coins, including DOGE, SOL, XRP, and even Donald Trump’s post-election TRUMP offering.
Spot Solana ETFs have emerged as one possible alternative to those based on BTC and ETH, and could launch on leading exchanges as early as this year.
New ETF instruments proposed so far include 21Shares Core Solana ETF, VanEck Solana Trust, Bitwise Solana ETF, and Canary Solana ETF. If approved they would track the price of SOL, currently the fourth-largest crypto by market cap.
And that’s only the start. Other issuers have said they have active plans to offer spot Dogecoin ETFs after the Trump/Elon Musk political partnership during the recent US Presidential contest sent the Shiba Inu-inspired meme coin skyrocketing to a three-year-high of USD 0.478 in December 2024.
ETF specialist issuer Rex Shares made an application earlier this month to launch its Rex-Osprey DOGE ETF, the company’s SEC filing shows.
Funds based on the price of Ripple’s XRP alt coin are also in the offing. Rex has made an application for its Rex-Osprey XRP ETF, as has Canary and 21Shares. Both applications are now being considered by the SEC, with financial watchdogs set to make a decision later in February.
Whether or not ETFs outside the realm of the big two will be approved or not remains to be seen. A raft of recent rule changes at the SEC, however, bode well for a green light from regulators.
Other possible ETFs could include an HBAR ETF, which Canary Capital applied for last November. HBAR is the native coin of the Hedera network.
Bloomberg analysts recency wrote that the odds are in favour of a spot HBAR ETF if it can launch ahead of higher-profile competitors like Solana and DOGE-based ETFs. How much pent-up investor demand there is, however, isn’t clear.
According to Bloomberg, a long list of Litecoin-based ETF applications have been made since pro-crypto President Trump's inauguration last week, as crypto’s restrictive US regulatory environment looks set to be loosened.
One of the first institutional investors to make big moves into crypto ETFs was Wells Fargo. The Main Street banker revealed a number of investments in Bitcoin ETFs in May of 2024, becoming an early entrant and one of the first major TradFi players to build a portfolio using recently-approved crypto-based instruments.
Paperwork filed with America’s Securities and Exchange Commission (SEC) said that the bank had purchased shares of Grayscale's GBTC spot Bitcoin exchange-traded fund (ETF), ProShares Bitcoin Strategy ETF (BITO), and holds a position in Bitcoin ATM company Bitcoin Depot Inc. The ProShares ETF provides investors with exposure to BTC futures contracts.
Given Wells Fargo’s size, the moves marked a notable entry into the Bitcoin market. Spot Bitcoin ETFs give investors exposure to BTC price movements without having to own the asset directly. For institutional investors seeking a stable market vehicle for BTC exposure, ETFs are seen as a safe way forward.
The news came amid a wider shift toward institutional acceptance of Bitcoin, with other US banks and financial institutions looking at different vehicles to build BTC into their offerings and gain exposure to the asset.
The week prior, US investment firm Susquehanna International also disclosed in an SEC filing that it had taken positions in spot Bitcoin and other Bitcoin ETFs, joining a wave of large financial institutions doing the same.
A February 2024 story from Bloomberg claimed that Wells Fargo and Bank of America's Merrill division were both getting ready to offer products that would give their customers exposure to Bitcoin ETFs.
Wells Fargo has frequently talked-up digital assets, even trialing its own digital currency in 2019.
In late October 2023, BTC shot past Bitcoin shot past USD 34,000, a new record high for the year, as traders rushed to liquidate short positions. The rush led to total BTC liquidations worth USD 145 million across all crypto assets by Wednesday 25th October.
On Coinbase, BTC was trading closer to USD 35,000. The dual rallies were connected to markets anticipating imminent approval of the first Bitcoin spot ETF by the Securities and Exchange Commission (SEC).
On 24th October 2023, a judge in Washington, DC, ordered the SEC to look again at a heavily-litigated and long delayed spot Bitcoin ETF application from Grayscale, after the financial watchdog agency appeared to ignore an earlier court action. A report by Galaxy Digital predicted that spot bitcoin ETFs could attract inflows worth USD 14.4 billion in the first year of issuance.
Global investment giant BlackRock also amended its own BTC ETF application to say that it was now taking initial steps to prepare for launch, going so far as to allocate funds and even registering a ticker symbol. That doesn't mean approval is guaranteed or necessarily coming soon, but it certainly points to growing confidence that the SEC will be compelled to give way.
The US Securities and Exchange Commission (SEC) had staunchly resisted approving spot Bitcoin ETFs because regulators believed there was too much risk of manipulation in crypto markets. Despite that stance, many industry observers noted that the SEC had been signaling that, against its better judgment, approval was likely in the cards.
Crypto analysts said both of the price spikes pierced the previous resistance thresholds of USD 31,000 and USD 34,000. In a note of caution, crypto analyst Rekt Capital tweeted that the bullish price action probably wasn’t enough to annul the ‘Bearish Bitcoin Fractal,’ a pricing methodology that assumes prices sometimes rally to record highs before backsliding.
