According to senior Bloomberg ETF analyst Eric Balchunas, an exchange-traded fund (ETF) tracking both Bitcoin and Ether is expected to be the first in a ‘wave’ of new United States crypto funds in 2025.
First in a Wave of New Crypto Funds
Balchunas posted to X on Dec. 17, sharing an analysis from fellow ETF analyst James Seyffart. The duo anticipates the first new Bitcoin and Ether combo fund to be followed by ETFs tracking Litecoin or Hedera.
The Securities and Exchange Commission (SEC) has rejected multiple Solana ETFs on Dec. 7. Seyffart noted that SOL and XRP ETFs would have to wait until President-elect Donald Trump’s SEC chair pick takes control before they will be ‘seriously considered.’
Regulatory Favoritism: Litecoin and Hedera Ahead
Balchunas highlighted that regulators view Litecoin and Hedera more favorably, which is the reason the two analysts say they may get ETFs before larger market-cap assets like XRP and Solana.
Litecoin is more likely to be green-lighted because it is a fork of Bitcoin and may be viewed as a ‘commodity,’ he said. Hedera has not been labeled as a security by the SEC, which makes it easier for an exchange-traded product to receive approval.
SEC and Crypto Regulation Under Trump
XRP and SOL have been labeled as securities by the SEC, with Ripple having been engaged in a years-long legal battle with the agency over the legal status of XRP. While the analysts see HABR and LTC as having higher odds of approval, they said it’s still unclear whether the funds will see much investor demand.
Many crypto pundits expect the SEC under Trump’s administration to be more receptive to crypto assets. Trump recently said he intended to nominate pro-crypto businessman and former SEC commissioner Paul Atkins as the next SEC chair, which legal experts say may bring de-regulation amid a more pro-crypto policy.
Current SEC Chair Gary Gensler announced that he would resign from the agency on the day of Trump’s inauguration on Jan. 20, while fellow Democratic commissioner Jamie Lizarrage said he would be stepping down days before that on Jan. 17. On Dec. 17, SEC Commissioner Caroline Crenshaw had her re-nomination vote canceled, opening up the possibility of four Trump-aligned and crypto-friendly commissioners.
The Rise of Crypto ETFs in the US
The expected wave of new cryptocurrency ETFs is a significant development for the industry, with many investors eagerly awaiting the opportunity to gain exposure to these digital assets through traditional investment vehicles. The creation of an ETF tracking Bitcoin and Ether will likely be followed by similar products for other popular cryptocurrencies.
However, it’s essential to note that even if these funds receive approval, there’s no guarantee they’ll see significant investor demand. Regulatory favoritism towards certain cryptocurrencies could lead to a surge in demand for those specific assets, while others may struggle to gain traction.
The Impact of Trump’s SEC Nominee on Crypto Regulation
Paul Atkins’ potential appointment as the next SEC chair is seen as a positive development for the crypto industry. As a pro-crypto businessman and former SEC commissioner, he may bring about a more favorable regulatory environment for digital assets.
The expected shift in SEC leadership could lead to a decrease in regulatory scrutiny of cryptocurrency-related activities. This change in policy could pave the way for more innovative projects and products to emerge within the industry.
Conclusion
The wave of new US crypto funds is an exciting development for investors and industry players alike. With the first Bitcoin and Ether ETF expected to be launched in 2025, followed by other cryptocurrency-tracking funds, this trend may signify a turning point for the industry’s mainstream adoption.
However, it’s essential to remember that regulatory approval is just one aspect of this process. The success or failure of these new funds will ultimately depend on factors like investor demand and market conditions.
References
- Balchunas, E. (2023). First in a wave of US cryptocurrency ETFs expected in 2025. X post.
- Seyffart, J. (2023). SEC rejects multiple Solana ETFs. Analysis.
- Trump, D. (2023). I intend to nominate pro-crypto businessman and former SEC commissioner Paul Atkins as the next SEC chair.
- Gensler, G. (2023). Resigning from the agency on Jan 20.
- Lizarrage, J. (2023). Stepping down on Jan 17.
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