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Zhitong Finance APP learned that the approval of the ETF by US regulators for Ethereum, the world's second-largest cryptocurrency, has triggered a wave of new product development by asset management companies for emerging digital asset classes. Just 48 hours later, ProShares submitted applications for six funds that will go long or short on Bitcoin or Ethereum. In addition, Hashdex is considering integrating the two tokens into one investment product, while VanEck plans to launch an ETF based on Solana, the fifth-largest cryptocurrency, despite many challenges.

The trend shows that ETF products are exploring a range of innovative cryptocurrency tools. Despite the possible reservations of the U.S. Securities and Exchange Commission, Bitcoin funds have become one of the ETFs with the most inflows this year, even surpassing some well-known technology funds.

Roxanna Islam, director of industry research at VettaFi, noted that ETFs are known for their innovative nature, and issuers will get creative in the cryptocurrency space. Although demand for these specific ETFs is not yet clear, as investor interest in traditional spot cryptocurrency ETFs grows, more applications for cryptocurrency strategies are expected to emerge in an attempt to catch this wave of demand.

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New funds are being launched increasingly frequently in the $9.4 trillion U.S. ETF market. So far this year, more than 330 new funds have started trading, compared with about 500 in all of last year. However, in a highly competitive market, funds are closing just as quickly, with more than 100 ETFs closing in 2024, the same as last year.

The successful launch of Bitcoin and Ethereum ETFs has exceeded many analysts' expectations, with inflows far exceeding expectations. Since their inception earlier this week, eight of the nine Ethereum ETFs have attracted inflows, with both BlackRock and Bitwise's products seeing inflows of more than $200 million. Despite this, the ETFs and their underlying asset, Ethereum, all fell on Thursday, with some market observers predicting that this could be a "buy the expectation, sell the fact" event.

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Meanwhile, Bitcoin funds have netted $17.5 billion so far this year. The launch of these ETFs, which have been years in the making, signals a softening of the U.S. regulatory environment for the digital asset sector, which could encourage asset managers to be more innovative.

Athanasios Psarofagis of Bloomberg Intelligence said issuers are always looking for innovative ways to make money and they will keep pushing the boundaries. Inverse and leveraged ETFs, which use derivatives to boost returns or pay out inverse returns of certain stocks or indexes, have become popular over the past year among retail investors who have seized on the opportunity to double or triple their gains, even though it comes with a greater risk of losses.

According to data from Bloomberg Industry Research, leveraged ETFs have accumulated inflows of about $9 billion in 2024, and are expected to exceed last year's $10.2 billion. In particular, a leveraged Bitcoin ETF traded under the BITX code has attracted nearly $2 billion in funds so far this year, an increase of 50%.

The rise of cryptocurrency ETFs and the launch of innovative products not only reflect the market's growing interest in digital assets, but also demonstrate how asset management companies can attract investors and meet market demand through innovation in the context of a gradually opening regulatory environment.