Bloomberg: More than a dozen crypto ETFs may be launched in 2025

Author: Vildana Hajric, Bloomberg News; Compiler: Wu Baht, Golden Finance

Providers of exchange-traded funds are finding increasingly creative (and potentially riskier) ways to lure investors into the cryptocurrency craze.

As 2024 comes to a close, the SEC has received a slew of filings for novel products. Proposed products include an ETF from ProShares that would denominated S&P 500 returns in Bitcoin. The fund planned by Strive Asset Management and REX Shares will offer convertible bonds issued by companies that can be used to buy Bitcoin. ETF firm Volatility Shares envisions the launch of inverse and leveraged Solana funds, along with a tool that uses futures contracts to track the sixth-largest digital token.

“This is a continued development of incorporating crypto strategies into ETFs. We will see a lot of these products in 2025,” said Bloomberg’s Athanasios Psarofagis. “It’s a hot topic — issuers like to hit the topic when it’s hot. We’re going to see everything with cryptocurrencies.”

All told, if these applications are approved, a dozen new cryptocurrency- focused funds will enter the space by 2025, one year after the launch of the first U.S. Bitcoin ETF.

2024 has been a banner year for cryptocurrencies, with Bitcoin—the world’s largest digital asset—surging more than 120% to surpass $100,000. This growth is thanks in part to incoming President Donald Trump's support for the industry, with many market observers betting that the Trump administration's more relaxed regulatory stance could help the cryptocurrency space grow further . Enthusiasm for his election drove annual inflows into the largest Bitcoin ETF, owned by BlackRock, to more than $37 billion, the third-highest among all funds, according to data compiled by Bloomberg.

Bitcoin enthusiast and MicroStrategy Inc. co-founder Michael Saylor also took advantage of the cryptocurrency's surge in price, doubling down on buying the largest token in the company's reserves. MicroStrategy has been using a combination of new equity and convertible debt sales to help finance the purchase -- and other companies have similar plans.

The REX ETF intends to invest the majority of its assets in convertible bonds issued by companies that hold Bitcoin, according to a filing. Meanwhile, Strive is proposing to launch a fund that would invest in derivatives such as swaps and options to gain exposure to convertible securities issued by MicroStrategy or other companies with similar investment strategies, according to documents filed last week.

“It’s rare that a new asset class emerges from the investing public, which is what cryptocurrencies are now — Wall Street has always been good at creating supply when there’s demand,” said Todd Sohn, ETF strategist at Strategas. “So this is the evolution of the crypto ETF universe: futures-based, spot-based, thematic and now convertible products, all highly specific to MicroStrategy and others involved in a similar capacity.”