SEC's Policy Change Paves the Way for a Surge in Crypto ETFs

The U.S. Securities and Exchange Commission (SEC) has introduced universal listing guidelines for spot cryptocurrency exchange-traded products (ETPs), aiming to simplify the approval process and potentially trigger a wave of new crypto ETFs. By removing the requirement for individual regulatory assessments for each product, the SEC intends to cut the average approval period from 240 days down to 75 days CoinDesk, [ 1 ]. This update, inspired by similar changes made for bond and equity ETFs in 2019, is anticipated to open the floodgates for new applications and launches, with analysts forecasting a notable uptick in activity CNBC, [ 2 ]. The revised standards apply to assets that either trade on Intermarket Surveillance Group (ISG) member exchanges or have had CFTC-supervised futures contracts for at least six months Blockchain Council, [ 3 ].

This approval is set to expand investor opportunities beyond

and , paving the way for major altcoins such as (SOL), , and (DOGE) to be offered as ETFs. Companies like Grayscale, Bitwise, and VanEck have already submitted proposals for multi-asset ETFs, while issuers such as Canary Capital and Wincent highlight these products’ significance for institutional participation and market liquidity Finance Monthly, [ 4 ]. Still, industry experts stress that the success of these ETFs will depend on the strength of the underlying assets. Matt Hougan from Bitwise points out that while ETFs make it easier for traditional investors to enter the market, actual investment flows will be driven by the asset’s real-world use and prevailing market sentiment—Ethereum’s slow uptake after its ETF debut is a case in point CoinDesk, [ 5 ].

The SEC’s move signals a broader shift in regulatory policy, aligning with the pro-crypto approach of the Trump administration and standing in contrast to the more cautious stance under Biden. The finalized rules, set for July 2025, will allow for faster approvals of tokens with established CFTC-regulated futures, likely putting Solana and XRP at the front of the line in the near future CNBC, [ 6 ]. Steve Feinour from Stradley Ronon expects the first of these products could hit the market as soon as October, though issuers must still navigate legal paperwork and coordinate with service providers Blockchain Council, [ 7 ].

Investors are urged to remain vigilant, especially regarding ETFs based on smaller-cap tokens. Kyle DaCruz of VanEck cautions that the market could see a surge in ETFs linked to highly speculative assets with low liquidity or practical use, posing risks for less experienced investors Finance Monthly, [ 8 ]. The SEC’s latest guidance on disclosures for crypto ETFs emphasizes the importance of transparency, mandating comprehensive information on risks such as price swings, custody solutions, and operational challenges SEC, [ 9 ]. These requirements are designed to safeguard investors and build confidence in a sector long associated with unpredictability.

The potential long-term effects on the crypto industry could be significant. By making digital assets more accessible to institutions, the SEC’s new rules could drive broader adoption, especially among retirement and pension funds. However, the influx of new ETF offerings also brings concerns about possible oversaturation and increased volatility. As Bitwise’s Teddy Fusaro observes, the crypto sector is experiencing a pivotal moment, but the real challenge will be whether investor demand for these ETFs leads to lasting inflows and price steadiness CoinDesk, [ 10 ].