Cryptocurrency ETFs Surge Predicted by 2025, Analysts Cite Potential SEC Leadership Changes

Bloomberg analysts Eric Balchunas and James Seyffart predict a surge in cryptocurrency ETFs by 2025, citing potential SEC leadership changes with pro-crypto

Bloomberg analysts Eric Balchunas and James Seyffart are predicting a surge in cryptocurrency ETFs by 2025, thanks in part to potential SEC leadership changes with pro-crypto advocate Paul Atkins' nomination. They expect a more favorable environment for ETFs linked to major tokens like Bitcoin, Ethereum, XRP, and others.

Here's what to expect in the next few years:

Bitcoin and Ethereum ETFs will likely lead the way in 2025. These products are aligned with existing regulatory frameworks, increasing their chances of approval. Companies like Hashdex, Franklin Templeton, and Bitwise are expected to introduce Bitcoin and Ethereum ETFs.

Don't expect Solana and XRP ETFs right away. Both cryptocurrencies are entangled in legal disputes regarding their classification as securities. XRP's parent company, Ripple, has been engaged in a lengthy legal battle with the SEC, while Solana faces similar scrutiny. Any ETF tied to these tokens will likely be delayed until the new SEC leadership clarifies the regulatory status.

In contrast, Litecoin and HBAR ETFs are more likely to gain approval. Litecoin's close association with Bitcoin—a fork of the Bitcoin blockchain—gives it a distinct advantage in regulatory discussions. Similarly, HBAR has avoided classification as a security, so it faces fewer legal problems.

However, the demand for these ETFs remains uncertain. Only a few issuers have expressed interest in launching Litecoin and HBAR ETFs, which may limit their market impact.

The approval of cryptocurrency ETFs in the U.S. has been a slow and winding road, largely due to the regulatory uncertainty surrounding digital assets. While the SEC has approved several Bitcoin futures ETFs, the highly anticipated spot Bitcoin ETFs faced significant delays.

The Trump administration had appointed several pro-cryptocurrency figures to the SEC, including Commissioner Hester Peirce, who has been a vocal advocate for approving spot Bitcoin ETFs. However, the Biden administration has yet to fill key positions at the SEC, and the nominees are expected to face scrutiny from both parties in the Senate.

Despite the delays, the growing demand from investors and the changing regulatory landscape are setting the stage for a potential breakthrough in the approval of altcoin ETFs in the next few years.