Crypto ETFs Go Mainstream

What does the “E” in “ETF” actually stand for? Financial professionals and armchair investors likely know the answer. However, on a recent episode of the popular quiz show Jeopardy!, none of the contestants could give the proper response.

Perhaps these three contestants just weren’t well-versed in the lexicon of investing, but it’s fair to say the public lacks familiarity with exchange-traded funds in comparison to popular financial instruments such as stocks and bonds. ETFs are made up of groups of securities packaged into funds. These fund shares trade on stock exchanges, requiring registration with the Securities and Exchange Commission. It’s a complex market that has gained mainstream popularity over the last decade-plus. And that $13.4 trillion ETF market is now growing even larger as crypto ETFs go mainstream.

The SEC is currently seeing a flood of crypto ETF filings. Bitwise Funds Trust submitted registration statements last month for 11 strategy-based crypto ETFs in a single day. Even more telling, Morgan Stanley, which has been a cautious latecomer to digital assets, has filed for Bitcoin and Solana ETFs of its own. In doing so, it joined other Wall Street blue bloods such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. in ramping up efforts to get into the crypto game.

The growth of the crypto ETF market started in 2024 with the launch of spot Bitcoin ETFs. Roughly 130 U.S. crypto funds now hold roughly $150 billion in assets, with most of that money tied up in Bitcoin-centric products. The regulatory footprint tells the same story: References to blockchain and crypto assets in SEC filings surged to roughly 8,000 by mid-2025, driven largely by Bitcoin-related ETF disclosures and amendments.

The real accelerant came in October, when the SEC introduced generic listing standards for crypto ETFs. Instead of requiring case-by-case approvals, the new framework allows crypto assets with qualifying futures markets to clear listing hurdles automatically. Asset managers are now racing to launch products tied not just to Bitcoin and Ethereum, but to a growing roster of altcoins designed to capture investor demand while the regulatory window is open.

Institutional investors are playing a major role in the shift. Until recently, retail traders dominated crypto markets, but that changed with the arrival of SEC-authorized spot Bitcoin and Ether ETFs. By the end of November 2025, institutional inflows had pushed assets under management to nearly $115 billion for Bitcoin ETFs and $17 billion for Ether ETFs. Investments that once felt too volatile or opaque for traditional finance now come packaged in familiar, exchange-listed products.

That institutional seal of approval simultaneously makes crypto ETFs feel safer and introduces new risks for investors. Custody of the underlying crypto assets is highly concentrated, with a small number of third-party custodians like Coinbase holding the majority of ETF assets. That concentration creates potential contagion channels. For example, a cyberattack, operational failure, or bankruptcy at a key custodian could ripple quickly through both crypto and traditional markets, reviving concerns that surfaced after FTX’s collapse in 2022.

Nevertheless, the SEC has already taken a further step toward modernization by implicitly approving tokenized securities through a DTCC pilot program. More significantly, the New York Stock Exchange itself announced this month, development of a platform for trading and on-chain settlement of tokenized securities. Subject to regulatory approvals, NYSE’s digital platform will enable 24/7 trading of U.S. listed equities and ETFs, instant settlement, and stablecoin-based funding. ICE, NYSE’s parent company, is already working with major banks including BNY and Citi to support tokenized deposits across its clearinghouses. The move signals that blockchain-based market infrastructure is moving from theory to practice – and with it all the opportunity and risk that entails. As crypto ETFs evolve from a niche experiment to mainstream investment vehicles, their growth underscores the need for robust oversight, infrastructure and investor education.

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