Author: Vildana Hajric, Bloomberg News; Compiled by: Wu Baht, Golden Finance

Providers of exchange-traded funds are finding increasingly creative (and potentially riskier) ways to attract Investors are jumping into the cryptocurrency craze.

As 2024 comes to a close, the SEC has received a slew of filings for novel products. Proposed products include an ETF from ProShares that would denominated S&P 500 returns in Bitcoin. The fund planned by Strive Asset Management and REX Shares will offer convertible bonds issued by companies that can be used to buy Bitcoin. ETF firm Volatility Shares envisions the launch of inverse and leveraged Solana funds, along with the launch of a tool that uses futures contracts to track the sixth-largest digital token.

“This is a continued development of incorporating crypto strategies into ETFs. We will see a lot of these products in 2025,” said Bloomberg’s Athanasios Psarofagis. “It’s a hot topic — issuers like to strike when the topic is hot. We’re going to see everything from cryptocurrencies.”

All in all, if these applications are approved, by 2025, the first time the U.S. A year after the creation of a Bitcoin ETF, more than a dozen new cryptocurrency-focused funds are entering the space.

2024 has been a banner year for cryptocurrencies, with Bitcoin - the world's largest digital asset - soaring more than 120% to surpass $100,000. This growth can be attributed in part to incoming President Donald Trump's support for the industry, with many market observers betting that Trump's looser regulatory stance could help the cryptocurrency space grow further. Enthusiasm for his election has driven annual inflows into the largest Bitcoin ETF, owned by BlackRock Inc., to more than $37 billion, the third-highest among all funds, according to data compiled by Bloomberg.

Bitcoin enthusiast and MicroStrategy Inc. co-founder Michael Saylor also took advantage of the cryptocurrency’s surge in price, doubling down on buying the largest token in the company’s reserve. MicroStrategy has been using a combination of new equity and convertible debt sales to help finance the purchase -- and other companies have similar plans.

The REX ETF intends to invest the majority of its assets in convertible bonds issued by companies that hold Bitcoin, according to a filing. Meanwhile, Strive is proposing to launch a fund that would invest in derivatives such as swaps and options to gain exposure to MicroStrategy or other companies, according to documents filed last week.Convertible securities issued by companies with similar investment strategies.

“It’s rare for a new asset class to emerge to the investing public, which is what cryptocurrencies are now — Wall Street has always been good at creating supply when there’s demand,” said Todd Sohn, ETF strategist at Strategas . "So this is how the crypto ETF universe has evolved: futures-based, spot-based, thematic and now convertible products, all highly specific to MicroStrategy and others involved in a similar capacity."