Several New Crypto ETFs Landed In September. What Should Investors Think?

Getty Images September meant the arrival of a range of new crypto-based ETFs.

Key Takeaways

Three notable crypto ETFs launched recently: the REX-Osprey XRP ETF, the REX-Osprey DOGE ETF (DOJE), and the Grayscale CoinDesk Crypto 5 ETF . They've seen mixed amounts of investor support so far. Some experts expect crypto index funds like GDLC to mark a particularly breakthrough for the sector.

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September brought the launches of several notable crypto exchange-traded funds. They haven't all been instant hits, though some have amassed substantial buy-in.

The launches mark a reacceleration of crypto ETF launches, which follow the debut of bitcoin ETFs early last year. Among the notable funds to debut this month were the REX-Osprey XRP ETF (XRPR), which tracks the digital asset XRP associated with Ripple; the REX-Osprey DOGE ETF (DOJE), which tracks the meme coinDogecoin; and the Grayscale CoinDesk Crypto 5 ETF (GDLC), which tracks an index that includes bitcoin and four other crypto assets.

XRPR has seen the most inflows, with around $67 million. GDLC dwarfs both DOJE and XRPR in size, with around $749 million in total assets under management; it has seen net outflows thus far, though that is considered typical for funds like it, which convert from a trust to an ETF. DOJE has seen a little under $20 million of inflows of its own.

Why This Matters for Crypto Investors

A raft of crypto products have recently hit the market, including several new ETFs. Not all have been immediate slam dunks, but experts expect more products on the way. Some think ETFs that track crypto indexes could be particularly popular with investors and financial advisers.

XRPR, meanwhile, broke the record for first-day trading volume in the entire ETF sector this year, according to Bloomberg analyst Eric Balchunas, as investors eagerly traded the Ripple-associated product. DOJE's first day of trading ranked in the top five.

A clearer crypto regulatory stance from the Securities and Exchange Commission was one of crypto industry's main expectations when President Donald Trump was reelected. In July, Bloomberg analyst James Seyffart told Investopedia that he expected "the vast majority, if not all" of the crypto ETF applications in the hands of the SEC at the time to gain approval before 2026.

This expectation was reinenforced by the recent SEC approval of a framework for listing new crypto ETFs more rapidly.

Easier approval for new ETFs doesn't guarantee investor interest in them, of course. Since their launches, XRPR is down about 7%, while DOJE is down 17%.

Still, broad investor reaction to crypto ETFs shows that investors so far appreciate their convenience and efficiency when considering crypto assets, according to FalconX Head of Research David Lawant. He expects "healthy interest" in some upcoming single-asset ETFs, if not to the same degree as with recent ETFs based on bitcoin and either.

Story Continues

Lawant sees funds that track crypto indexes as the "real breakthrough in this new wave" of crypto ETFs.

"They make it easier for investors to bypass asset-by-asset selection and simply gain broad market exposure," said Lawant; he expects them to be particularly popular with financial advisers who are accustomed to putting clients in index-based products.

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