The race to launch the first U.S.-approved cryptocurrency exchange-traded fund (ETF) has intensified, with major asset management firms ramping up their applications despite ongoing regulatory hesitation. While investors and institutions alike are eager for broader access to digital assets through traditional financial vehicles, the U.S. Securities and Exchange Commission (SEC) remains cautious—raising critical questions about market maturity, investor protection, and financial stability.
This article explores the evolving landscape of cryptocurrency ETF applications, the shifting strategies of financial giants, and what recent regulatory developments might mean for approval in 2025.
A Surge in Cryptocurrency ETF Applications
In recent months, a wave of new ETF filings has swept across the U.S. financial sector. In August alone, eight major institutions—including Invesco, ProShares, VanEck, Valkyrie Digital Assets, and Galaxy Digital—submitted proposals for cryptocurrency-related ETFs. These filings reflect growing institutional confidence in blockchain technology and digital assets as a legitimate asset class.
However, momentum doesn’t guarantee approval. Just days after submitting two Ethereum futures-based ETF applications, VanEck and ProShares unexpectedly withdrew them—without public explanation. This abrupt move underscores the uncertainty surrounding SEC decision-making and highlights how even well-prepared firms must remain agile in navigating regulatory hurdles.
Despite setbacks, the industry’s persistence is clear. Over the past decade, numerous attempts to launch spot Bitcoin or Ethereum ETFs have been delayed, denied, or voluntarily pulled back. The core issue? The SEC’s longstanding concerns about market manipulation, fraud, and inadequate investor safeguards in crypto markets.
“The primary reason behind previous rejections lies in the perceived immaturity of the Bitcoin market,” explains Wang Haifeng, senior researcher at OKLink Research Institute. “The SEC’s mandate is to protect investors and maintain market integrity—and until recently, crypto markets didn’t meet those standards.”
Yet by 2025, conditions may finally be aligning for change.
Traditional Financial Giants Enter the Arena
One of the most significant shifts in 2025 is the entry of established Wall Street players into the crypto ETF space. Unlike earlier applicants rooted in blockchain-native ecosystems, firms like Goldman Sachs, Fidelity, and SkyBridge Capital are now actively pursuing regulatory approval—signaling deeper institutional acceptance.
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For example, Goldman Sachs filed an application for its “Goldman Innovation DeFi and Blockchain Equity ETF,” which would focus on publicly traded equities tied to decentralized finance (DeFi) and blockchain innovation—not direct crypto holdings. This approach sidesteps some of the SEC’s concerns about spot market volatility while still offering exposure to the broader digital economy.
Similarly, Grayscale Investments continues its high-profile effort to convert its Bitcoin Trust (GBTC) into a spot ETF—a move that could unlock billions in pent-up demand from institutional portfolios currently limited by GBTC’s premium/discount structure and lack of liquidity.
These strategic pivots reveal a key trend: rather than pushing against regulatory walls, firms are adapting their product designs to align with SEC expectations.
Innovative Structures Reshape the ETF Landscape
Modern crypto ETF applications are no longer limited to straightforward "buy-and-hold" models. Instead, issuers are introducing creative structures designed to satisfy both investor appetite and regulatory scrutiny.
Consider Invesco’s Bitcoin Strategy ETF, which doesn’t invest directly in Bitcoin. Instead, it allocates capital across:
- Bitcoin futures contracts,
- Exchange-traded products (ETPs) backed by BTC,
- Private funds with crypto exposure—such as Grayscale’s GBTC.
This layered strategy diversifies risk while maintaining price correlation with Bitcoin—making it more palatable to regulators wary of direct custody issues.
Volt Equity takes a different route: its proposed fund will invest at least 80% of assets in companies that hold Bitcoin on their balance sheets or actively develop blockchain infrastructure. Up to 25% may go toward MicroStrategy, one of the largest corporate Bitcoin holders with over 105,000 BTC valued at more than $5 billion.
Another innovative approach comes from Victory Capital, whose application seeks to create a fund tracking the Nasdaq Crypto Index (NCI)—a rules-based benchmark measuring performance across major digital assets. By anchoring returns to a recognized index, this model adds transparency and governance—two qualities the SEC values highly.
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Regulatory Hurdles and Shifting Signals
Despite increasing sophistication in fund design, the SEC remains cautious. New Chair Gary Gensler, who took office in April 2025, has emphasized that digital assets fall squarely within the agency’s oversight mandate. At the Aspen Security Forum earlier this year, he reaffirmed the need for strong investor protections and robust anti-manipulation frameworks.
Still, there are encouraging signs.
In July 2025, the SEC approved the Bitcoin Strategy ProFund—the first U.S.-registered mutual fund to track Bitcoin prices via futures contracts traded on the Chicago Mercantile Exchange (CME). While not an ETF, this marks a pivotal precedent: a regulated fund gaining indirect exposure to crypto through compliant derivatives.
Gensler himself has hinted at a path forward: “I expect staff to review applications carefully—especially those limited to CME-traded Bitcoin futures.” This suggests that futures-based ETFs remain the most likely near-term candidates for approval.
Coinbase, in a report to institutional clients, noted that U.S. policy toward digital assets appears to be softening. With rising retail interest, maturing infrastructure, and improving market surveillance tools, many analysts believe a Bitcoin ETF approval is now inevitable—possibly within 2025.
Wang Haifeng agrees: “Compared to just a few years ago, the Bitcoin market is far more mature. Liquidity is deeper, exchanges are more secure, and regulatory clarity is emerging globally. These changes increase the chances of a breakthrough.”
Frequently Asked Questions (FAQ)
What is a cryptocurrency ETF?
A cryptocurrency ETF is an exchange-traded fund that provides investors with exposure to digital assets like Bitcoin or Ethereum without requiring direct ownership. It can track spot prices, futures contracts, or related equities.
Why hasn’t the SEC approved a spot Bitcoin ETF yet?
The SEC has historically cited concerns over market manipulation, fraud, custody risks, and insufficient surveillance mechanisms in crypto markets—though these concerns are gradually being addressed.
Are futures-based crypto ETFs safer in the eyes of regulators?
Yes. Futures-based ETFs rely on regulated derivatives markets like CME, where price discovery is transparent and oversight is stronger—making them less risky from a regulatory standpoint.
What would approval mean for investors?
Approval would allow mainstream investors to gain crypto exposure through retirement accounts (like 401(k)s), brokerage platforms, and tax-advantaged vehicles—expanding access and potentially boosting adoption.
Which companies are leading the ETF race?
Key contenders include VanEck, Invesco, Grayscale, Fidelity, and SkyBridge Capital—all vying for early-mover advantage once regulatory green lights appear.
Could Ethereum ETFs follow Bitcoin?
Possibly—but only after a spot Bitcoin ETF is approved. Ethereum’s classification as a security versus commodity remains legally ambiguous, adding complexity to its approval timeline.
Final Outlook: Is 2025 the Breakthrough Year?
While no decision has been finalized, all indicators point toward growing momentum. Market infrastructure has improved significantly since 2017. Institutional participation is rising. Regulatory precedents—like the ProFund approval—are being set.
With SkyBridge’s long-delayed Bitcoin ETF application scheduled for review and multiple futures-based proposals under active consideration, 2025 could mark a turning point.
The question is no longer if but when the SEC will approve its first cryptocurrency ETF. And when it does, it won’t just be a win for issuers—it will reshape how millions invest in the future of finance.