Sophia’s Thoughts On ETF Developments
Bitcoin ETFs have shattered expectations, drawing billions in inflows and reshaping institutional access to crypto. Could Solana and other alt-coins be next in line?
These are Sophia's Thoughts:
Bitcoin ETFs have become some of the most successful financial products ever, surpassing USD 100 billion in AUM and outpacing major equity ETFs in inflows.
The iShares Bitcoin Trust ETF (IBIT) saw more inflows in 2024 (USD 24 billion) than the Invesco QQQ Trust (QQQ)
With Solana leading the next wave of crypto ETFs, major issuers have refiled applications, and regulatory momentum is building under the pro-crypto Trump administration.
A Solana ETF could unlock massive institutional inflows, but regulatory hurdles remain, making macroeconomic factors and shifting policies key to watch in the months ahead.
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🚀 Last week’s market performance
The crypto market continued to sell off this week upon tariff and macroeconomic fears, ending the session down 5.0%. Bitcoin (BTC) performed slightly better than the market, ending the week down 3.9%. The best performing coin of the week was PancakeSwap (CAKE), which gained 19.8% after expanding its trading offerings. The worst performing coin this week was Arweave (AR) which fell 23.9%.
🧐 What is your crypto mood today?
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🏆 Where Are Bitcoin ETFs Now?
Bitcoin ETFs have exceeded all expectations, establishing themselves as some of the most successful financial products ever launched. Since their approval in January 2024, Bitcoin ETFs have attracted over USD 38 billion in net inflows and surpassed USD 100 billion in assets under management (AUM). BlackRock’s flagship product, the iShares Bitcoin Trust (IBIT), has led the charge and accumulated over USD 56 billion in AUM—making it one of the fastest-growing ETFs in history.
Bitcoin ETFs have also outpaced major equity ETFs in inflows. Notably, the iShares Bitcoin Trust ETF (IBIT) saw more inflows in 2024 (USD 24 billion) than the Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100. This signals a shift in investor sentiment, with institutions and retail traders increasingly viewing Bitcoin as a key portfolio asset.
The success of Bitcoin ETFs has been an on-ramp for further institutional adoption, giving investors exposure to BTC without the complexities of custody or self-storage. However, investors are eager for broader ETF offerings beyond Bitcoin, and asset managers are responding to the demand with a handful of new filings.
🌍 Which ETFs are next?
The next wave of crypto ETFs is taking shape, with Solana at the forefront. Bitwise, VanEck, 21Shares, Canary Capital, and Grayscale have all refiled their applications for a spot Solana ETF after initially withdrawing them in late January. As of February 11th, the SEC has now officially acknowledged filings from all five issuers, signaling progress in bringing Solana-based financial products to market. Bloomberg analyst James Seyffart noted that this is “newsworthy because the SEC had refused to do this in recent filing attempts for SOL.”
Additionally, Franklin Templeton appears poised to enter the Solana ETF race after filing documents in Delaware to register the Franklin Solana Trust. This development mirrors the approval process seen with Bitcoin ETFs, further fueling expectations that Solana could be next in line. Given the shifting regulatory landscape under the Trump administration, momentum is building around potential altcoin ETFs, with many now anticipating approvals for XRP and Litecoin.
Beyond Solana, the ETF landscape continues to expand. BlackRock is reportedly preparing to enter the European crypto exchange-traded product (ETP) market, signaling growing global demand. Meanwhile, Trump Media & Technology Group (TMTG) has filed trademarks for a Truth.Fi Bitcoin Plus ETF, along with thematic ETFs focused on U.S. energy and manufacturing.
🔮 What Comes Next for Crypto?
A Solana ETF could unlock a wave of new capital inflows into the asset, just as Bitcoin ETFs have. Solana is now leading decentralized exchange (DEX) trading volume for the second consecutive month, surpassing Ethereum and all its Layer 2s combined with USD 59 billion in trading volume. Significant regulatory and structural challenges remain. Solana lacks a regulated U.S. futures market, a factor that played a key role in the approval of Bitcoin and Ethereum ETFs. Additionally, the SEC has classified Solana as an unregistered security in past lawsuits, which could complicate approval efforts unless there is a broader shift in regulatory attitudes.
Market expectations have been rising; Polymarket data suggests an 82% probability that a spot Solana ETF will be approved in 2025, reflecting increasing confidence in a shifting regulatory environment. Bloomberg ETF analysts James Seyffart and Eric Balchunas currently estimate a 70% chance of a Solana ETF securing approval by year-end. Optimism around altcoin ETFs is also growing, with Polymarket showing an 84% chance of a Litecoin ETF approval and an 81% probability for a Ripple ETF in 2025. If the ETF for Solana is approved, it could open the floodgates for a broader wave of altcoin-based ETFs.
While the rapid developments in crypto ETFs signal growing institutional adoption and regulatory progress, broader macroeconomic uncertainties still pose challenges. Tariff tensions, inflationary pressures, and shifting monetary policies continue to weigh on global markets. The Federal Reserve is expected to hold interest rates steady at its March 19 meeting, with a 95.5% probability that the target rate will remain at 4.25%–4.50%, per market expectations. While the long-term trajectory for crypto ETFs looks promising, short-term headwinds remain, making it crucial to watch both regulatory shifts and macroeconomic trends in the months ahead.
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