Last Updated on August 13, 2025 by Olga Davis
The term “crypto ETFs” has been hard to miss in the news, in trading communities, and in boardrooms over the past few months. If you’re wondering what ETFs are in crypto and why the buzz is so high right now, it’s because of a perfect storm of new rules, money coming in, and new ideas that could change the way people invest in crypto forever.
ETF Net Flow Chart. Source: coinmarketcap.com
What Are Crypto ETFs And How Do They Work?
An Exchange-Traded Fund (ETF) is a type of investment fund that tracks the performance of an asset or a group of assets and trades on stock exchanges just like a regular stock. A crypto ETF functions in much the same way, but instead of tracking traditional financial indices like the S&P 500, it tracks the price of one or more cryptocurrencies, such as Bitcoin or Ethereum.
- Spot crypto ETFs. These ETFs actually hold the underlying cryptocurrency in custody. For example, a spot Bitcoin ETF owns real Bitcoin stored securely by a custodian. This means that the ETF’s price moves almost exactly in line with the cryptocurrency itself, giving investors direct exposure without needing to handle private keys or digital wallets.
- Futures-based crypto ETFs. Instead of holding the actual cryptocurrency, these ETFs use derivatives called futures contracts to replicate price movements. This allows investors to gain exposure to crypto prices without owning the asset directly. Futures-based ETFs may sometimes diverge slightly from the spot price due to contract rollovers or market dynamics, but they still offer a way to participate in crypto’s price changes within a regulated framework.
The benefit is clear: investors can get price exposure to crypto without having to deal with private keys, wallets, or complicated self-custody solutions. Of course, the crypto world is far from simple, and staying informed is key. If you want to dive deeper, don’t miss our related articles on NEIRO crypto, Bitcoin dominance, the best cryptocurrency apps for beginners, and how to make money with Bitcoin.
Why Crypto ETFs Are Suddenly the Hottest Topic in Finance
The three biggest U.S. exchanges, the NYSE, NASDAQ, and Cboe, have all filed with the SEC for generic listing standards for crypto ETFs. This is what is causing the buzz.
A proposed SEC rule change could simplify the launch of spot crypto ETFs. While Bitcoin ETFs have thrived since their 2024 approval, exchanges may no longer need separate SEC approval for new ETFs like Cardano ETFs, Solana ETFs, XRP ETFs, and others. If products meet specific criteria, they could launch faster, accelerating the growing pipeline of filings. This signals surging trust in regulated crypto markets, fueling secure crypto lending opportunities with us.
If the new framework gets the green light, a lot of crypto ETFs could hit the market in just a few months, highlighting why digital assets continue to attract attention. For a broader perspective, exploring 10 reasons why you should invest in cryptocurrency can provide useful context.
Investor Demand Is Already Massive
The numbers tell the story:
In 2025, U.S. spot cryptocurrency ETFs have seen a remarkable $18.8 billion in net inflows in just the first three months, signaling unstoppable trust in regulated crypto markets. Spot Bitcoin ETFs attracted $12.8 billion in July alone, led by funds like BlackRock’s iShares Bitcoin Trust (IBIT). Spot Ether ETFs surged with $5.41 billion in July 2025, with eight of their ten best inflow days occurring in that month. It’s a massive wave of capital into regulated crypto products, empowering secure lending opportunities with us.
Crypto ETFs’ Regulatory Tailwind
“Give us clear rules” has been the industry’s motto for many years. We’re finally witnessing that now:
1️⃣ A stablecoin legal framework was established by the Genius Act.
2️⃣ After passing the House, the Clarity Act, a bill pertaining to the structure of the digital asset market, is now on its way to the Senate.
3️⃣ To investigate bringing financial markets on-chain, the SEC started Project Crypto.
4️⃣ For spot Bitcoin and Ether ETFs, in-kind creations and redemptions are now permitted.
5️⃣ The rules regarding liquid staking tokens have been made clear.
Institutional investors and advisors are feeling more confident about treating cryptocurrency exchange-traded funds (ETFs) as a permanent asset class as a result of this wave of regulatory advancements.
Beyond Crypto ETFs: IPOs, SPACs, and Public Listings
The spike in interest in cryptocurrency isn’t solely due to ETFs. As a sign of growing institutional confidence in digital assets, crypto-native companies are increasingly making their way into traditional capital markets through SPAC mergers and initial public offerings (IPOs), in addition to exchange-traded products.
Consider Bullish, a business that has more than $2 billion in cryptocurrency on its books. Its introduction to the public market demonstrates how companies with substantial cryptocurrency holdings are becoming more reputable and drawing interest from investors. In a similar vein, Circle’s IPO announcement has established a precedent, speeding up the plans of other blockchain companies to go public and proving that digital assets are becoming essential to mainstream finance rather than being restricted to niche markets.
The Future of Crypto and Why It Is Here to Stay
A record number of cryptocurrency exchange-traded funds (ETFs) may launch in late 2024 or early 2025, provided the SEC approves generic listing standards. This development will bring more options, greater liquidity, and additional regulated avenues for retail investors to engage with digital assets. For institutions, it signals that cryptocurrency exposure is shifting from an experimental side bet to a standard component of diversified portfolios.
So What…?
While holding and investing in crypto remains a natural choice, that doesn’t mean your capital needs to be locked up. Crypto loans on CoinRabbit offer a way to use digital assets as collateral to access liquidity without selling. Important advantages include:
- Accessing cash without triggering taxable events
- Maintaining market exposure if crypto prices rise
- Flexible repayment options and liquidation protection
- Using funds strategically without reducing your crypto holdings
