- Analysts anticipate a major shift in the cryptocurrency market in 2025, driven by a new wave of crypto ETFs under improved regulatory conditions.
- Bitcoin-Ethereum ETFs are expected to lead, with Litecoin (LTC) and Hedera Hashgraph (HBAR) showing higher approval odds due to regulatory advantages.
- Solana (SOL) and XRP face significant challenges from legal and regulatory issues, hindering their crypto exchange-traded funds prospects.
- Market demand remains uncertain, with concerns about whether newer altcoin-based crypto exchange-traded funds can attract sufficient investor interest.
The cryptocurrency market may witness a transformative shift in 2025 with a “new wave” of crypto exchange-traded funds (ETFs) as analysts expect regulatory improvements under the incoming Trump administration.
Bloomberg Intelligence experts forecast that ETFs of the Bitcoin-Ethereum combination will lead the charge in this transformation, followed closely by Litecoin (LTC), at number three, and Hedera Hashgraph (HBAR). The outlook is not bright for Solana (SOL) and XRP because of their lingering legal and regulatory issues.
Eric Balchunas, Bloomberg’s senior ETF analyst, highlights the imminent proliferation of crypto ETFs, to say nothing of Litecoin’s advantage. “Litecoin benefits because it’s considered a fork of Bitcoin,” he says, invoking its status as a commodity in the eyes of US Securities and Exchange Commission (SEC) regulations. This differentiation could hasten the pace at which Litecoin-based ETFs will be approved, and even more so because Bitcoin has already received a green light from regulators.
Hedera Hashgraph (HBAR) also presents an interesting case. First, the token has avoided being called a security to keep it away from being plagued by regulatory controversies in the way many other digital currencies are. These, among many other factors, may be contributing to analysts’ verdicts that Litecoin and HBAR ETFs are likely to get through easily, while those linked with Solana and XRP are not so promising.
In stark contrast, Solana and XRP remain embroiled in legal complexities. The SEC’s recent rejection of Solana’s exchange-traded funds applications and active lawsuits challenging their status as securities create major hurdles. According to analysts, all these issues need to be addressed before ETFs related to such tokens are approved.
Litecoin and HBAR Lead ETF Approval Odds
According to James Seyffart, another Bloomberg ETF analyst, “Litecoin and HBAR both have higher odds of approval compared to Solana and XRP. But it is not obvious that there’s investor demand.”
Market interest remains another critical question. The only issuer to file ETFs tied to Litecoin and HBAR is Canary Capital, a relatively new entrant, raising doubts about whether these products can attract sufficient investor enthusiasm.
Even for the more established Bitcoin and Ethereum, the growth of the crypto exchange-traded funds market depends on whether altcoins can create enough demand to justify new offerings. Seyffart and Balchunas remain cautious about how tepid demand might slow the momentum of these ETFs.
The next US administration will play a very important role in shaping the crypto exchange-traded funds landscape. Analysts believe that clearer regulatory guidelines, particularly on token classification, may unlock opportunities for altcoins like Solana and XRP to join the exchange-traded funds marketplace.
While 2025 will hopefully be a turning point for crypto ETFs, a lot remains to be done. For sure, the expected wave may be limited by a number of factors, such as legal uncertainty and investor hesitation, which brings up the following question: Will 2025 be the year for crypto ETF expansion, or will regulatory and market inertia cause another delay?
With the high stakes and ever-changing landscapes facing the crypto market, currently inches closer to this important day, all eyes are being glued on the regulatory direction course plus the investor sentiment.
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