Hotcoin Research | Comprehensive Analysis of Popular Crypto Asset ETFs: Who Will Secure the Next ETF Approval?

I. Introduction

With Trump’s return to the White House and his pledge to make the U.S. a “crypto capital,” will the SEC open the floodgates for crypto ETFs? Bitcoin and Ethereum ETFs have already been approved, attracting substantial capital from traditional finance. Now, popular candidates like SOL, XRP, ADA, and DOGE are eager contenders. As regulatory policies loosen while market uncertainties persist, the future landscape of crypto ETFs remains unpredictable. This article provides an in-depth analysis of regulatory developments and market trends to shed light on the next steps for crypto ETFs.

II. Understanding ETFs and Approval Criteria

1.What is an ETF?

An ETF (Exchange-Traded Fund) is an investment vehicle traded on stock exchanges, designed to track specific indices, sectors, or asset classes (e.g., gold, stocks, cryptocurrencies). ETFs allow investors to gain exposure to a diversified portfolio without directly holding the underlying assets. Unlike mutual funds, ETFs can be bought and sold throughout the trading day, offering greater flexibility.

Crypto ETFs serve as a bridge between the cryptocurrency market and traditional finance, enabling investors to gain exposure to crypto assets through conventional brokerage accounts without needing to manage digital wallets. This not only lowers the barrier to entry but also enhances market liquidity and transparency.

2. Spot ETFs vs. Futures ETFs

• Spot ETFs hold the actual underlying asset. For example, a spot Bitcoin ETF (e.g., iShares Bitcoin Trust IBIT) directly owns Bitcoin, meaning its price closely reflects the actual market price of Bitcoin. Spot ETFs provide direct exposure to the asset, making them more suitable for long-term investment.
• Futures ETFs invest in futures contracts rather than directly holding the asset. For example, a gold futures ETF holds gold futures contracts, meaning its performance depends on the futures market, which may cause price deviations due to factors like market contango or backwardation. Futures ETFs provide indirect exposure to assets via derivatives, making them more attractive to short-term traders looking to capitalize on price fluctuations.

Spot ETFs have a more significant impact on crypto prices than futures ETFs because they require actual asset purchases, leading to increased market demand. The approval of spot ETFs signals regulatory confidence in the maturity and integrity of crypto spot markets, further driving institutional adoption. This is why the market’s primary focus remains on the approval of spot ETFs.

3. U.S. SEC ETF Approval Standards

The SEC maintains stringent criteria for crypto ETF approval, emphasizing market manipulation risk, liquidity, and transparency.

• Market Manipulation and Surveillance Agreements: The SEC has long been concerned about the susceptibility of crypto spot markets to manipulation, especially since many exchanges operate offshore or lack regulatory oversight. To mitigate these risks, the SEC requires exchanges to establish Surveillance-Sharing Agreements (SSA) with major regulated markets, ensuring real-time monitoring of suspicious trading activities to prevent price manipulation.
• Asset Liquidity: The SEC evaluates whether the underlying asset has sufficient market capitalization and trading volume to support ETF share creation and redemption without causing excessive volatility. High-liquidity assets, such as Bitcoin, which is traded globally across multiple exchanges 24/7, meet these criteria. In contrast, smaller market-cap tokens are more vulnerable to price manipulation, making them less likely to secure SEC approval.
• Transparency and Custody: ETF issuers must demonstrate transparent pricing mechanisms and robust asset custody solutions. Pricing should reference a composite index derived from multiple regulated exchanges to prevent data distortion. Custody must ensure asset security through multi-signature wallets, cold storage, and other protective measures to guard against hacking and loss. Overall, the SEC expects applicants to present comprehensive plans for market surveillance, fraud prevention, and investor protection to ensure market fairness and safeguard investors’ interests.

Notably, SEC’s stance toward crypto ETFs is dynamic, adjusting with market and regulatory developments. Under Chairman Gary Gensler (2021–2023), several spot ETF applications, including at least two for Solana, were rejected due to market manipulation and investor protection concerns. Post-2024, with regulatory leadership changes and improving market conditions, the SEC has begun reassessing these criteria, gradually approving some crypto ETFs under stricter monitoring conditions. Thus, while regulatory standards remain rigorous, interpretations of when these standards are met continue to evolve.

III. BTC & ETH ETF Approval Timeline and Performance

1. Bitcoin ETFs

Source: https://www.coinglass.com/bitcoin-etf

Bitcoin ETF Approval Timeline:

• Early Attempts (Since 2013): The crypto industry began advocating for Bitcoin ETFs as early as 2013. The Winklevoss Bitcoin Trust submitted the first application, but the SEC repeatedly rejected it due to concerns over market manipulation and regulatory shortcomings. While Bitcoin futures ETFs were approved in October 2021, spot ETFs faced prolonged resistance. The landscape began to shift in 2023–2024, as several major asset management firms submitted applications for spot Bitcoin ETFs, drawing significant market attention.
• Key Developments (2023–2024): Market anticipation surged in 2023, particularly after major firms like BlackRock submitted applications. In December 2023, the SEC approved 19b-4 filings (exchange rule changes) for multiple institutions, marking a critical step toward spot Bitcoin ETF approval.
• Official Approval (January 2024): On January 10, 2024, the SEC approved S-1 filings (registration statements) for 11 spot Bitcoin ETFs, which began trading on major U.S. exchanges (e.g., Nasdaq, NYSE) on January 11, 2024.

Currently Approved 11 Spot Bitcoin ETFs:

• BlackRock iShares Bitcoin Trust (IBIT)
• Grayscale Bitcoin Trust (GBTC)
• Fidelity Wise Origin Bitcoin Fund (FBTC)
• ARK 21Shares Bitcoin ETF (ARKB)
• Bitwise Bitcoin ETF (BITB)
• Invesco Galaxy Bitcoin ETF (BTCO)
• Valkyrie Bitcoin Fund (BRRR)
• Franklin Bitcoin ETF (EZBC)
• WisdomTree Bitcoin Fund (BTCW)
• VanEck Bitcoin Trust (HODL)
• Hashdex Bitcoin ETF (DEFI)

As of March 11, 2025, the total net asset value (NAV) of the 11 spot Bitcoin ETFs is approximately $100 billion, down from the January 31 peak of $125.7 billion. The top three ETFs are:

• IBIT (BlackRock): $46.3 billion
• FBTC (Fidelity): $16.2 billion
• GBTC (Grayscale): $15.8 billion

Source: https://www.coinglass.com/bitcoin-etf

2. Ethereum ETFs

Source: https://www.coinglass.com/eth-etf

Ethereum ETF Approval Timeline:

• Initial Applications (Since 2023): Following progress in Bitcoin ETF approvals, several institutions began applying for spot Ethereum ETFs using the Bitcoin ETF regulatory framework.
• Key Milestone (May 2024): On May 23, 2024, the SEC approved 19b-4 filings for multiple exchanges, allowing the launch of spot Ethereum ETFs.
• Official Approval (July 2024): On July 23, 2024, the SEC approved S-1 filings for spot Ethereum ETFs. It took about two months from the 19b-4 approval to the final S-1 approval, slightly slower than Bitcoin ETFs, possibly due to complexities related to Ethereum staking.
• Trading Launch: The first batch of spot Ethereum ETFs began trading on major U.S. exchanges in late July 2024.

Currently Approved 9 Spot Ethereum ETFs:

• Grayscale Ethereum Trust (ETHE)
• BlackRock iShares Ethereum Trust (ETHA)
• Fidelity Ethereum Fund (FETH)
• 21Shares Core Ethereum ETF (CETH)
• VanEck Ethereum ETF (ETHV)
• Bitwise Ethereum ETF (ETHW)
• Invesco Galaxy Ethereum ETF (QETH)
• Franklin Ethereum ETF (EZET)
• WisdomTree Ethereum Fund (ETHF)

The size of Ethereum ETFs is significantly smaller than Bitcoin ETFs. As of March 11, 2025, the total value of Ethereum ETFs is approximately $6 billion. The two largest are:

• ETHE (Grayscale): ~$2.5 billion
• ETHA (BlackRock): ~$2.4 billion

IV. Potential for Approval of Other Crypto ETFs

Following the successful approval of Bitcoin and Ethereum spot ETFs, the demand for ETFs based on other crypto assets has been rising. As of March 11, 2025, several cryptocurrencies beyond Bitcoin and Ethereum have submitted ETF applications to the SEC, including Ripple (XRP), Solana (SOL), Litecoin (LTC), Cardano (ADA), Hedera (HBAR), Polkadot (DOT), and Dogecoin (DOGE).

Below is a summary of the current crypto ETF applications and their key details:

1. Ripple (XRP)

Bitwise, WisdomTree, Canary Capital, and 21Shares submitted the first XRP ETF application in October 2024. Ripple’s XRP powers RippleNet, a network for fast, low-cost cross-border payments used by major institutions such as American Express, SBI Holdings, and Siam Commercial Bank. However, ongoing legal battles with the SEC over whether XRP is a security could delay approval. In July 2023, a court partially ruled against the SEC, but the dispute remains unresolved. SEC analysts suggest that approval is unlikely until the Ripple case is fully settled.

2. Solana (SOL)

VanEck, 21Shares, Canary Capital, Bitwise, and Grayscale have submitted Solana ETF applications. Solana’s market capitalization and adoption make it one of the strongest ETF candidates after Bitcoin and Ethereum. However, in 2023, the SEC classified SOL as a potential security, creating uncertainty. While market interest remains high, approval depends on either regulatory clarity or new legislative developments.

3. Litecoin (LTC)

Canary Capital and Grayscale have applied for a Litecoin ETF. Litecoin, created in 2011 by former Google engineer Charlie Lee, is widely considered a commodity rather than a security. Known as “digital silver,” Litecoin’s commodity-like status increases its approval chances. Bloomberg predicts a 90% chance of approval by mid-July 2025.

4. Cardano (ADA)

Grayscale submitted a Cardano ETF application in February 2025, which has been formally accepted by the SEC. Cardano, led by Ethereum co-founder Charles Hoskinson, focuses on peer-reviewed research and security upgrades. However, the SEC has previously classified ADA as a security, which could hinder approval. Cardano’s DeFi ecosystem has been criticized for slow development, with a Total Value Locked (TVL) of only $340 million as of March 12, 2025, ranking 18th according to DeFiLlama.

5. Hedera (HBAR)

On March 12, 2025, the SEC formally accepted Grayscale’s Hedera ETF application. Hedera Hashgraph, based on a Directed Acyclic Graph (DAG) structure, offers high throughput and low latency. Its governance council includes major corporations like Boeing, Google, and IBM, which manage network nodes and decision-making. Hedera’s enterprise-focused governance and decentralization model increase its appeal. HBAR is not currently classified as a security by the SEC, making it a strong ETF candidate. Analysts predict Litecoin and Hedera could be the next crypto ETFs approved after Bitcoin and Ethereum.

6. Polkadot (DOT)

21Shares and Grayscale submitted Polkadot ETF applications in February 2025. Polkadot, founded by Ethereum co-founder Gavin Wood, aims to enable blockchain interoperability. DOT was originally issued through an ICO, raising potential security concerns. However, the SEC has not listed DOT as a regulatory enforcement target, suggesting fewer approval obstacles compared to other assets.

7. Dogecoin (DOGE)

Grayscale and Bitwise submitted Dogecoin ETF applications in early 2025, and the SEC has formally accepted them. This marks a significant shift in SEC’s attitude toward meme coins. Dogecoin’s community is highly active on social media and frequently organizes charitable and sponsorship events. Elon Musk’s public endorsement since 2020 has also driven Dogecoin’s popularity. However, critics argue that DOGE lacks clear utility and ongoing development, raising concerns about its long-term value.

V. Future Outlook: Which Cryptocurrencies Are Most Likely to Get ETF Approval?

Short-Term Outlook (2025–2026)

2025 is widely considered the “Altcoin ETF Breakthrough Year.” With the successful approval of Bitcoin and Ethereum ETFs, regulators are now evaluating applications for other crypto ETFs. Litecoin (LTC) is widely expected to be the first non-BTC/ETH ETF to gain approval due to its commodity-like properties and low regulatory risk. Approval could come as early as 2025. Next in line are Hedera (HBAR) and Solana (SOL). HBAR has a higher approval chance due to its enterprise adoption and lack of a security label. Despite regulatory setbacks, Solana’s strong ecosystem and market demand put its approval probability at around 70%.

Dogecoin (DOGE) remains a notable candidate. Despite its grassroots origins, its approval probability is estimated at 75% under the current regulatory landscape. However, the SEC’s approach to its volatility will be a decisive factor. XRP may also secure ETF approval if Ripple wins or settles its lawsuit in 2025. If so, the SEC may expedite approval for one or more XRP ETFs in response to legal and market changes.

Cardano (ADA) and Polkadot (DOT) face more hurdles due to previous ICO and security classification issues, making their approval less likely in the short term.

By year-end 2025, 2–3 new crypto ETFs (likely LTC, SOL, XRP, or HBAR) could be approved, offering investors expanded access to diversified crypto ETFs.

Long-Term Outlook (2027 and Beyond)

Looking further ahead (2027 and beyond), crypto ETFs are expected to expand significantly, reshaping the financial markets:

1. More Second-Tier Cryptos in ETFs: Besides the mentioned assets, other high-value ecosystems (e.g., Polygon, Avalanche, Cosmos) could qualify for ETFs if they demonstrate regulatory compliance and market maturity. As crypto regulations evolve, clearer commodity vs. security classifications will remove legal barriers for a broader range of ETF approvals. By 2027, most of the top 20 cryptocurrencies by market cap could have their own ETFs, expanding investor access to diversified crypto assets.

2. Innovative ETF Strategies: Actively managed crypto ETFs (with portfolio adjustments based on market conditions), yield-generating ETFs (staking-based returns), and derivative-based ETFs (futures and options strategies) could emerge. Concepts like Ethereum staking yield ETFs or Bitcoin option-enhanced ETFs are already under discussion. Their approval would offer new ways to generate returns from crypto assets and signal the maturity of crypto asset management.

3. Global Market Integration: Crypto ETFs are expected to expand beyond the U.S., with Europe and Asia following suit in regulatory developments. Cross-listing of U.S.-approved ETFs in international markets (and vice versa) could facilitate a globally interconnected crypto ETF market. Regulated ETFs in key financial hubs may become central to crypto price discovery, reducing market manipulation risks and volatility over time.

4. Mainstream Asset Allocation: Crypto ETFs are expected to become a standard part of institutional and retail investment portfolios. Financial advisors and institutional investors will increasingly allocate crypto ETFs for portfolio diversification, inflation hedging, and risk-adjusted returns. Retail investors may indirectly hold crypto ETFs via pension funds and investment products, accelerating the convergence of crypto and traditional finance.

VI. Conclusion

The rising number of crypto ETF applications and growing Wall Street interest signal that crypto assets are entering the mainstream financial landscape. The SEC’s stance on crypto ETFs has evolved — from initial resistance to gradual approval in 2024 — and Trump’s pro-crypto policy stance could further accelerate ETF approvals and institutional adoption. Crypto ETFs appear poised for a major breakthrough, potentially ushering in a new phase of growth for the crypto industry.

For retail investors, crypto ETFs are a double-edged sword. On one hand, they lower the technical and operational barriers to crypto investing, allowing less tech-savvy investors to enter the market with reduced risk. Through ETFs, investors avoid concerns over private key loss and exchange security, making crypto investing as simple as buying a stock. This facilitates portfolio diversification and exposure to blockchain industry growth.

On the other hand, crypto markets remain highly volatile and subject to regulatory uncertainty, which will directly impact ETF prices. Investors should carefully evaluate the underlying assets and associated risks before investing.

In summary, Crypto ETFs will play a critical role in shaping the future of digital asset investment. At this pivotal moment, we are witnessing regulatory shifts and the emergence of the first wave of crypto ETFs. Looking ahead, a more diverse range of crypto ETFs will likely enter the market, further integrating digital assets into the global financial system.

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