Nate Geraci, President of ETF Store, outlined five bold predictions for the crypto exchange-traded fund (ETF) market in 2025.
Sharing his insights on X (formerly Twitter), Geraci highlighted crucial advancements that could shape the market. Here’s a look at his predictions and their implications.
Geraci’s crypto ETF predictions as legal teams prepare for a busy year
Geraci highlighted the heavy workload awaiting ETF legal teams in 2025. He echoed the comments of Franklin Templeton’s head of digital assets.
“It looks like ETF legal staff will be busy during the first part of the year,” Geraci explained.
With the crypto ETF space poised for dramatic growth, Geraci shared five developments that are expected to dominate financial news.
Combined launch of Spot BTC and ETH ETFs
Geraci anticipates the launch of combined Bitcoin and Ethereum spot ETFs, a move that appears imminent following recent regulatory steps. As reported by BeInCrypto, the SEC (Securities and Exchange Commission) recently approved a dual Bitcoin and Ethereum ETF for Hashdex and Franklin Templeton, which laid the groundwork for the launch of this financial instrument.
These combined ETFs will likely attract broader investor participation, simplifying exposure to cryptocurrencies within a single product. Looking back, ETF analyst Eric Balchunas predicted a possible January 2025 launch, adding credence to Geraci’s optimism.
“Probable launch in January. They have a market capitalization weighting, so approximately 80/20 BTC/ETH. It is worth noting that Hashdex and Frankie are the first. Good for them,” Balchunas shared in December.
ETH Spot ETF Options Trading
Building on the momentum of Bitcoin spot ETF options trading, Geraci predicts the emergence of Ethereum spot ETF options in 2025. The recent OCC (Office of the Comptroller of the Currency) approval of trading Bitcoin ETF options have already set the stage for such developments.
BlackRock’s Bitcoin ETF options performed exceptionally well, with sales exceeding $425 million on the first day of trading. Likewise, Grayscale’s Bitcoin ETF options hit the market on November 21. Both advances suggest that Ethereum’s inclusion may only be a matter of time.
In-kind creation of BTC and ETH ETFs
Introducing in-kind creation and redemption mechanisms for BTC and ETH spot ETFs is another step Geraci is considering. This follows historic SEC approvals of cash redemptions for Bitcoin ETFs in January and ETH ETFs in May.
In-kind mechanisms are expected to improve liquidity and reduce costs, making ETFs more attractive to institutional investors. Looking back, the cash versus in-kind creation debate heated up in late 2023 as filers campaigned for approval of Bitcoin ETFs. The US SEC had encouraged ETFs to create funds in cash rather than in kind to avoid the use of unregistered brokers.
“The SEC is concerned about money laundering through in-kind creations in a spot bitcoin ETF, which is why it looked only at in-cash creations (which is a much more closed system),” a noted Balchunas.
However, in-kind creations are considered more advantageous for investors due to spreads and tax consequences. They are considered a better option because they offer the cleanest structure for the issuer and end investors. Conversely, cash redemptions require issuers to hold cash equivalents that back their ETFs.
“Have 100 ETF shares equal to 1 bitcoin, then the ETF provider must have the cash equivalent of 1 bitcoin at all times. This makes things a lot more difficult,” one X user explained at the time.
Given that in-kind creations are arguably better in terms of tax and spread, it is understandable that issuers are still inclined to push for this policy.
ETH ETF Spot Staking
While the US SEC does not like the staking functionality for ETH ETFs under Gary Gensler, Geraci predicts that this restriction could change. Initially, major players like BlackRock and Fidelity sacrificed their staking capabilities to secure the SEC.
In contrast, European markets have already embraced staking ETPs, with products like Bitwise’s Solana staking ETP gaining traction. If regulatory barriers are lifted under a pro-crypto administration, ETH ETF staking could become a reality.
Spot SOL ETF Approval
Geraci’s final prediction focuses on the approval of a spot Solana ETF. Although the SEC recently halted new Solana ETF filings, a change in regulatory stance under the Trump administration could improve the odds. Trump’s pro-crypto stance, as industry experts have pointed out, suggests a more favorable environment for new ETF products.
“Solana’s biggest win coming from the new Trump presidency will be our long-awaited ETF in 2025 or 2026. No surprise, the incredible VanEck team will lead the charge here with the support of 21Shares and Canary Capital,” said Dan Jablonski, head of growth at news and research company Syndica.
As the crypto-ETF ecosystem advances, Geraci’s predictions suggest a transformative era for digital asset investing. The convergence of regulatory advancements, institutional interest and new product offerings positions crypto ETFs as the cornerstone of the 2025 financial ecosystem.
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