In 2024, Bitcoin became widely used & the biggest bitcoin fund in the world is BlackRock’s iShares Bitcoin Trust, which debuted in January. Last week Bitcoin hits $10,0000 mark.
Asset managers are competing to add smaller tokens to exchange-traded funds in an attempt to capitalize on the popularity of bitcoin funds, by incorporating smaller tokens such as Ether, Solana, and XRP into ETFs. Still some investors are doubtful in doing so.
Not all investors believe that smaller tokens such as Ether, Solana, and XRP will follow in Bitcoin’s footsteps. They are skeptical that these smaller, riskier coins will follow Bitcoin’s trend.
Donald Trump’s unexpected acceptance of digital assets and the explosive debut of the first U.S. exchange-traded funds to contain the cryptocurrency helped make Bitcoin a household name in 2024.
Smaller tokens like Solana and XRP are viewed with skepticism by some investors.
So, the main factor that influenced Bitcoin’s mainstream adoption is huge support of digital assets by President Donald Trump.
In anticipation that a second Trump administration will bring a golden age for digital currencies, bitcoin prices have more than doubled this year and surged 40% since Election Day.
Spot bitcoin ETFs are a class of 12 new funds that make it as easy for regular investors to buy bitcoin in their brokerage accounts as equities.
Since their inception, the funds have drawn $36 billion in fresh capital, and the enormous price increase has caused their assets to soar to over $116 billion.
ETFs have significantly influenced the price of bitcoin, with 12 funds collectively holding over one million bitcoins, making them the world’s largest collective holder.
Analyst Eric Balchunas reveals that the ETFs’ success was a surprise, despite initial optimism. The cryptocurrency’s recent collapse, which sent the price below $16,000, sparked skepticism about its place in conventional investors’ portfolios due to its history of ferocious rises and falls.
Bitcoin ETFs are gaining popularity, with BlackRock and Fidelity being early winners. The iShares Bitcoin Trust is the largest bitcoin fund globally, with $56 billion in assets. Fidelity’s Wise Origin Bitcoin ETF has grown to $21 billion, while asset managers are incorporating smaller, riskier tokens.
VanEck, Bitwise Asset Management, and 21Shares are launching ETFs to hold tokens like solana and XRP. Canary Capital plans to launch funds holding niche tokens like litecoin and hedera.
Grayscale Investments plans to convert its multitoken fund, which holds bitcoin, ether, solana, XRP, and Avalanche blockchain’s AVAX token, into an ETF. However, existing ETFs holding ether have only recorded $2.5 billion in net inflows since their July debut.
The Securities and Exchange Commission, led by Gary Gensler, has been watching smaller tokens closely. His office designated dozens of cryptocurrencies, including solana and XRP, as unregistered securities that were illegally distributed to the public. Gensler plans to resign after Trump becomes president.
According to persons familiar with the subject, the SEC recently rejected submissions from stock exchanges seeking to list solana ETFs on behalf of various asset managers.
Bitcoin bulls believe the Trump government will be friendlier. The president-elect has named Paul Atkins, a cryptocurrency consultant who has questioned the SEC’s approach to the industry, as the agency’s next chairman.
The Trump administration may be more accommodative, according to bitcoin bulls. Paul Atkins, a crypto consultant who has questioned the SEC’s approach to the industry, has been selected by the president-elect to be the agency’s next head.
Nate Geraci, president of the investment-advisory company ETF Store, predicted that ETF issuers would become more assertive. I wouldn’t be shocked to see more asset managers applying for various alt-coin exchange-traded funds.
Throwing their hat in the ring early here has very few drawbacks. Analysts doubt whether there is a market for such items, even if authorities give their launch approval.
What Personal Investors Thinking
According to Grant Engelbart, an investment consultant at Carson Group, advisers view bitcoin as a digital gold, risk asset, and possible store of value. Understanding ether and the fundamental value it offers is more challenging. Too few advisors, in my opinion, are aware of Solana and some of these other cryptocurrencies.
According to Mike Akins, the founder of the investing analytics website ETF Action, he vehemently opposes the notion that bitcoin is a wise investment just because the biggest asset managers are creating products based on it.
According to Akins, an expert in the ETF sector, “asset managers’ jobs are to build products where there is demand from their clients so they can charge fees on it.” Remember that they also lacked
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