Cryptocurrencies had quite a year in 2024. Bitcoin (BTC +4.66%), the world's largest cryptocurrency, topped $108,000 and altcoins have surged as well. Most of the gains came in the final two months of the year after Donald Trump won the presidential election. Trump's administration is expected to be very favorable to crypto, clarifying regulatory gray areas and implementing policies intended to help the sector grow.
A lighter regulatory backdrop will also likely lead to more brokerages being able to sell crypto and more spot crypto exchange-traded funds (ETFs), which can be very positive for crypto prices. Here are four cryptocurrencies that could get their own spot ETFs in 2025.
A proven catalyst
Crypto spot ETFs seek to mirror the price of certain cryptocurrencies. These ETFs buy and hold the cryptocurrency they are mirroring and then assign a certain number of shares based on how much of that cryptocurrency they own. Crypto ETFs are intended to make purchasing crypto easier because ETFs are quite liquid and take care of some of the more intricate parts of buying cryptocurrencies directly.
The Securities and Exchange Commission (SEC) approved Bitcoin and Ethereum spot ETFs earlier this year and the lead-up to these approvals drove up the prices of both tokens. Bitcoin spot ETFs were approved in January 2024 and Ethereum ones received approval in July. While ETF approval was not the only reason both tokens performed well, it was certainly a contributing factor.
Bitcoin Price data by YCharts.
Now, with SEC Chairman Gary Gensler expected to step down once Trump takes office and Paul Atkins nominated to be his replacement, many believe this could open the floodgates for more spot crypto ETFs. Eric Balchunas, a senior ETF analyst at Bloomberg, thinks 2025 will bring a combined Bitcoin-Ethereum ETF, as well as one for Litecoin (LTC +1.70%), Hedera (HBAR +4.43%), XRP (XRP +4.01%), and Solana (SOL +5.19%).
Balchunas believes the combined Bitcoin-Ethereum ETF will happen first, Litecoin next because it was created as a fork of Bitcoin in 2011, Hedera, and then XRP and Solana. Balchunas believes XRP and Solana will come later in 2025 because both are labeled as securities in pending lawsuits, which makes matters more complicated. As many know, the SEC sued XRP in 2020, claiming Ripple, the company that created the token, and its founders sold XRP as unregistered securities in 2013. Solana has faced similar allegations from the SEC. These lawsuits are important because they could give the SEC more regulatory jurisdiction over many cryptocurrencies if the outcome goes in the agency's favor.
A federal judge sided with Ripple and its founders but the SEC appealed parts of the decision. With Gensler on his way out, many expect these lawsuits to fade as well but Bulchunas thinks the SEC needs new leadership before XRP and Solana get approved for ETFs. The lawsuits may need to end once and for all, too.
The two most exciting spot crypto ETFs
I expect XRP and Solana ETFs to be the most exciting spot ETFs and the most bullish for their respective cryptocurrencies. Companies are already filing applications for these ETFs and both altcoins have soared since Trump won. The SEC's lawsuit against XRP has been an overhang on the token for several years up until recently, and I suspect it hasn't helped Solana either. Both XRP and Solana have immense potential, given their efficient and innovative networks. Many cryptocurrencies are tough to value because they don't generate cash flows or have intrinsic value, so I think it would be more prudent to start with a smaller speculative position.
