The U.S. Securities and Exchange Commission (SEC) has opened the door for a wave of new crypto exchange-traded products (ETPs) to enter the market, a shift analysts believe could transform investment flows into digital assets.
On Wednesday, the agency approved generic listing standards for “commodity-based trust shares” across regulated exchanges such as Nasdaq, Cboe BZX, and NYSE Arca.
Read more: SEC Eases Process for Crypto ETF Listings, Approves New Fund
The updated regulations eliminate the requirement for individual rule filings for each crypto ETP under Section 19(b) of the Exchange Act. Now, an offering can be listed if its underlying assets meet specific eligibility criteria—such as trading on a market that is part of the Intermarket Surveillance Group (ISG) or having its underlying asset’s futures contract traded on a CFTC-regulated market for at least six months.
What’s next?
This regulatory change is seen as monumental for the cryptocurrency sector, as it alleviates procedural delays that have traditionally hampered the introduction of new crypto products, according to analysts.
“The floodgates for crypto ETFs are about to open,” said Nate Geraci, a noted ETF analyst and president of NovaDius Wealth Management.
“Expect a significant surge of new applications and launches,” he stated. “It may not be to everyone’s liking, but crypto is moving into the mainstream with ETFs.”
Matt Hougan, CIO of Bitwise, a digital asset management firm, described the SEC’s action as a “”coming of age” moment for cryptocurrencies.
“[This is] a signal that we’ve reached the big leagues,” he noted. “But it’s just the beginning.”
History supports the expectation that the number of new crypto ETF launches will increase under the new guidelines. When the SEC approved generic listing standards for bond and stock-based products in 2019, ETF launches more than tripled, jumping from 117 to 370 within a year, Hougan highlighted.
What does it mean for crypto prices?
Hougan advised caution about assuming new crypto ETPs will lead to significant inflows. “The mere existence of a crypto ETP doesn’t guarantee major inflows,” he wrote. “There needs to be fundamental interest in the asset itself.”
For instance, the early stages of spot ether (ETH) ETFs saw minimal inflows until nearly a year after their launch, when stablecoin activity and Ethereum’s investment narrative gained traction, Hougan explained.
Conversely, products linked to smaller-cap assets with less obvious use cases may find it difficult to attract investment without renewed fundamentals, he added.
Nevertheless, Hougan believes ETPs significantly reduce barriers for traditional investors, making it easier for both institutional and retail investors to enter crypto as sentiment shifts. They also help demystify cryptocurrencies for mainstream audiences as names like Avalanche and Chainlink appear in brokerage accounts.
“We are witnessing underlying assets with less recognition being integrated into these investment wrappers and strategies,” noted Paul Howard, senior director at Wincent. “For institutions that cannot directly own spot crypto, these vehicles provide a means to channel liquidity into the ecosystem.”
Large-cap altcoins are likely to benefit from this trend. “Dogecoin, XRP, Solana, and others are ushering in a new wave of products as investors explore opportunities beyond Bitcoin and ETH,” Howard remarked.
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