2024 Spot Encryption ETF Review: A Milestone Towards the Mainstream

2024 is a turning point year for the cryptocurrency market. After ten years of waiting, the United States finally approved the listing and trading of Bitcoin Spot ETF on January 11. This decision not only created a trading volume of $4.6 billion on the first day and a net inflow of $628 million but also opened a new chapter in the legalization of global crypto assets. Subsequently, several countries and regions, including Hong Kong and Australia, launched Bitcoin Spot ETFs, further promoting the globalization of crypto assets.

As of now, the assets of US crypto ETFs have exceeded $122.39 billion, while those in Hong Kong have reached $467 million. Throughout this year, various institutional investors, including endowment funds, pension funds, hedge funds, investment advisors, and family offices, have become holders of crypto ETFs. In addition to Bitcoin, ETFs for other digital assets such as Solana and XRP have gradually entered the public eye, laying the groundwork for development in 2025.

Key Moments of the Encryption Spot ETF

Bitcoin Spot ETF

• January 11, 2024: The United States officially approved the listing of Bitcoin Spot ETF.
• January 19: Bitcoin ETF became the second largest ETF product category in the United States, surpassing the Silver ETF.
• April 15: Hong Kong has in principle approved Bitcoin and Ethereum Spot ETF.
• April 30: 6 virtual asset Spot ETFs officially listed for trading in Hong Kong.
• June 4: Australia's first Bitcoin Spot ETF begins trading
• September 23: The United States approved Bitcoin ETF options trading

Ethereum Spot ETF

• April 24: Hong Kong approves Ethereum Spot ETF
• May 24: The US SEC approved the first Spot Ethereum ETF 19b-4 filing.
• July 23: The US SEC officially approved the Ethereum Spot ETF.

Other encryption related ETFs

• June 20: North America's first Solana Spot ETF application submitted
• August 8: Brazil approves the world's first Solana Spot ETF
• November 22: US exchanges submitted 4 Solana Spot ETF listing applications to the SEC.
• December 4: Grayscale seeks to convert Solana Trust into a Spot ETF

ETF Market Performance Analysis

The total assets managed by ETFs listed in the United States exceed $10 trillion, with $40 billion invested in the encryption field, accounting for 0.4% of the overall ETF market. However, in 2024, the net inflow of Bitcoin Spot ETFs accounted for 3.5% of all net inflows of US ETFs, significantly higher than traditional asset classes.

The liquidity of Bitcoin ETFs is 4.5 times that of inflation-adjusted gold ETFs. The BTC holdings of the U.S. Bitcoin Spot ETF have exceeded 1.13 million, making it the largest "Bitcoin holder" in the world.

As of December 24, the total net inflow of Bitcoin Spot ETF in the United States reached 35.49 billion USD, with a total net asset value of 110 billion USD. BlackRock's IBIT net asset value accounted for nearly 50%, reaching 53.7 billion USD.

The inflow and liquidity of the U.S. Ethereum Spot ETF have significantly increased since November. As of December 24, the total net inflow reached $2.51 billion, with a total net asset value of $12.35 billion. Grayscale's ETHE and BlackRock's ETF together account for 69.3% of the total assets of U.S. Ethereum Spot ETFs.

Outlook for Cryptocurrency ETFs in 2025

In 2025, more encryption assets are likely to enter the ETF field. Although regulatory challenges still exist, the continued participation of institutional investors and the gradual maturation of the market will provide more momentum for the future development of the cryptocurrency industry.

Industry predictions:

• The staking feature may be integrated into the Ethereum ETF
• Other cryptocurrencies like Solana may launch Spot ETFs.
• Weighted encryption index ETF may appear
• ETF inflows are expected to continue to increase.
• The new SEC leadership may approve more Spot encryption exchange-traded products.
• Bitcoin ETF inflows in 2025 may exceed those in 2024.

With the development of encryption ETFs, encryption assets are expected to become an important component of global investment portfolios, promoting the deep integration of traditional finance and digital assets.