A wave of crypto exchange-traded funds (ETFs) could enter U.S. markets as soon as this fall, potentially reshaping access to the digital asset landscape for both institutional and retail investors. While some view this as a pivotal moment for mainstream adoption, others are bracing for the inevitable fallout.
“The crypto ETF floodgates are set to open this fall, and investors will soon be swimming in these products,” said Nate Geraci, president of NovaDius Wealth Management. He believes most of the 90-plus crypto ETF applications currently filed with the U.S. Securities and Exchange Commission (SEC) will gain approval, assuming they fulfill the final listing requirements.
Ultimately, though, Geraci stated that it will be investors — not regulators — who determine which products succeed.
“The beauty of the ETF market is its meritocracy; investors vote with their hard-earned money. The market naturally distinguishes between winners and losers, so I’m not overly concerned about an excess of crypto ETFs,” he added.
According to Geraci, there is already significant — and underestimated — demand for more diverse and accessible investment options.
“Given the initial reactions to futures-based and 1940 Act-structured Solana and XRP ETFs, I believe the demand for 1933 Act spot products in these cryptocurrencies is being severely underestimated — similar to what we observed with spot bitcoin and ether ETFs,” he said.
The iShares Bitcoin Trust (IBIT), managed by BlackRock, became the most successful ETF launch in history, now holding nearly $85 billion worth of bitcoin on behalf of investors.
While ether ETFs initially saw significantly lower demand compared to their bitcoin counterparts, a recent surge in interest for Ethereum’s native token has led to inflows that far exceed those of bitcoin ETFs.
Since July, ether ETFs have attracted nearly $10 billion, which makes up the bulk of the total inflows of $14 billion since their launch last year, according to James Seyffart, an ETF analyst at Bloomberg Intelligence.
Geraci also expects strong interest in index-based crypto ETFs, which he believes will provide investors and advisors with a straightforward approach to gain exposure to the broader digital asset ecosystem. He acknowledges that demand for smaller, lesser-known tokens will largely depend on the strength of each project’s fundamentals.
“As you delve deeper into the crypto market cap spectrum, I anticipate that the demand for spot ETFs will be more closely linked to the success of individual projects and the performance of their underlying assets — factors that are challenging to predict at this point,” he said.
Seyffart concurs that the pipeline of crypto-related products is on the verge of exploding — but he expresses skepticism about how many will endure.
“If all of those applications ultimately launch, we will undoubtedly see some closures within the next few years,” Seyffart noted. He expects a decent demand for many of these products, but suggests that expectations need to be adjusted — particularly for altcoins.
“I’m not convinced that many of these longer-tail altcoins will manage to produce five or more successful ETFs,” he added. “If people are measuring success against bitcoin ETFs, they will be sorely disappointed. But if some anticipate that all of them will fail — they will also be gravely mistaken.”
In his opinion, the market is moving into a testing phase where issuers will release numerous products to see which ones will gain traction. “These issuers are going to launch a multitude of products and attempt to find something that resonates,” Seyffart explained. He predicts that the next 12 to 18 months will see “hundreds of crypto-related ETP launches.”
Both analysts agree on one key point: the ETF format cultivates a fiercely competitive environment where investor interest ultimately dictates success. While SEC approval may open the doors, it’s the asset flows that will determine which products survive.
In the ETF realm, product closures are expected — not an anomaly. Just like in the stock market, low demand or poor performance can lead to fund shutdowns. Therefore, not every new crypto ETF will be a worthwhile investment, even if it is associated with a well-known blockchain project.
For instance, a Solana ETF may attract buyers if the underlying token continues to draw developers and users. However, five different ETFs based on the same coin? That’s where both Seyffart and Geraci believe the market will likely make its own corrections.
“If demand doesn’t materialize, those products will shut down,” Seyffart remarked.
Underlying this trend is an increasing institutional acceptance of crypto. Following the SEC’s approval of spot bitcoin and ether ETFs last year, asset managers have hurried to file new offerings tied to Solana, XRP, dogecoin, and others, including basket funds that track multiple coins. These products present traditional investors with a regulated way to access crypto markets without needing to set up wallets or manage private keys.
However, with this access comes the responsibility of being discerning.
“Ultimately, investors will determine which products make sense and which do not,” Geraci said. “That’s how the ETF market has always functioned.”
And with hundreds of crypto funds potentially entering the market soon, that decision may need to be made swiftly.
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