The new spot Bitcoin (CRYPTO: BTC) exchange-traded funds (ETFs), which launched back in January, have been a big hit with investors. In fact, they've arguably been one of the biggest new product debuts on Wall Street in nearly 30 years. They represent a watershed moment for the crypto industry, as Bitcoin investing finally shows signs of going mainstream.

But there are already plenty of ETF alternatives beyond just the new spot Bitcoin ETFs. As investment firms continue to file paperwork with the Securities and Exchange Commission (SEC) for new crypto ETFs, it's likely a slew of new ETF investment products are coming in 2025 as well. So what can we expect?

Spot ETFs for other cryptocurrencies

As soon as the spot Bitcoin ETFs received approval from the SEC, anticipation quickly mounted as market participants pondered which crypto might be next. No surprises here, but Ethereum (CRYPTO: ETH) led the way. Nearly six months after the launch of the spot Bitcoin ETFs, the new spot Ethereum ETFs started trading in late July.

While these Ethereum ETFs have not garnered as much buzz and hype as the Bitcoin ETFs, they do offer investors the prospect for even more diversification within the crypto asset class. For now, the most popular spot Ethereum ETF remains the iShares Ethereum Trust (NASDAQ: ETHA). This makes sense, given that the most popular spot Bitcoin ETF is the iShares Bitcoin Trust (NASDAQ: IBIT).

So which cryptocurrency will be next to get an ETF? The most likely prospects are cryptocurrencies with huge market caps, a passionate retail base, and specific risk/reward attributes that appeal to institutional investors. From my perspective, Solana (CRYPTO: SOL) remains the most likely crypto to get a new spot ETF in 2025. After all, Brazil recently approved a spot Solana ETF, so the thinking is that the U.S. market could be next.

It is also possible to get clues about which spot ETFs might be coming to market in 2025 by keeping an eye on new crypto product launches from Grayscale, which continues to create new trusts for specific cryptocurrencies. The thinking here is that these trusts might one day be converted into spot ETFs, as was the case with Grayscale's Bitcoin and Ethereum trusts. Thus, the launch of a new Grayscale trust for XRP (CRYPTO: XRP) in September made headlines, given that XRP is often rumored as a potential spot ETF candidate.

Caveats for ETF investors

While it's exciting that the spot ETF investment product has caught on with both retail and institutional investors, it's important to point out that not all new crypto ETFs are spot ETFs. Many of them deploy derivatives or other financial instruments to achieve certain performance goals. In this category, I would include the new leveraged and inverse Bitcoin ETFs that give investors the opportunity to make even bigger bets on the future direction of Bitcoin.

You could be playing with fire here, and you might get burned. For example, the new leveraged and inverse ETFs track daily moves in Bitcoin, and not long-term moves in Bitcoin. And they employ derivatives to do this, rather than investing in Bitcoin directly.

Fear and greed are powerful emotions, and it's easy to see how, in the event of a major move up or down for Bitcoin, these leveraged and inverse ETFs could become more popular. For now, most investors should stick to the spot Bitcoin ETFs (which invest only in Bitcoin), and not get mixed up with all the new ETFs that use derivatives.

Looking ahead to 2025

So what other twists and turns can we expect in 2025? It's easy to see how the election of a pro-Bitcoin president might lead to the creation of a "USA Bitcoin" ETF that only invests in Bitcoin mined within the United States. Or what about an ETF linked to the creation of a new strategic Bitcoin reserve (which promises to buy 1 million Bitcoin for the U.S. government)?

It is also looking increasingly likely that we will begin to see new derivatives based on existing spot ETF products. So, for example, the SEC recently approved options trading on the iShares Bitcoin Trust. You can already trade options on Bitcoin, but now you will be able to trade options on the iShares Bitcoin ETF. In theory, that should help to attract even more institutional investors, since it will give them more ways to hedge their Bitcoin exposure.

One thing is certain: The crypto ETF genie is now out of the bottle, and there's no way to put it back in. The new spot Bitcoin ETFs have already been embraced by individual investors, institutional investors, and hedge funds. So it's safe to say that they will tip even further into the mainstream in 2025.

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Dominic Basulto has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.

Love the New Spot Bitcoin ETFs? These Other Crypto ETFs Are Also Making a Splash With Investors. was originally published by The Motley Fool