The US Securities and Exchange Commission (SEC) is currently reviewing 72 crypto-related exchange-traded fund (ETF) filings, indicating a broad industry effort to bring a wide range of digital assets to the US ETF market. These filings cover assets such as XRP, Litecoin (LTC), Solana (SOL), Dogecoin (DOGE), and themed funds like Pudgy Penguins. Some proposals include spot ETFs for specific cryptocurrencies and leveraged/inverse products tied to derivatives. Issuers are also seeking approval for options trading on newly launched or proposed crypto ETFs, particularly those linked to Ethereum (ETH) and Bitcoin (BTC).
ETF approval is compared to a band gaining access to major music streaming services by Bloomberg senior ETF analyst Eric Balchunas. He emphasizes that getting a coin ETF-ized puts it where the majority of investors are, potentially increasing distribution potential. The filings cover a wide array of strategies beyond traditional spot ETFs, with issuers proposing leveraged, inverse, and thematic products targeting speculative traders and those seeking tailored exposure to crypto price movements.
Despite the influx of altcoin and memecoin-related funds, the projection is that Bitcoin will maintain its dominance within the crypto ETF segment. Bitcoin ETFs currently make up around 90% of global crypto fund assets, and even with new products entering the market, Bitcoin is expected to retain a significant share, likely between 80% and 85% in the long term. Bitcoin’s entrenched position as the primary institutional entry point into the crypto market is expected to persist, creating a more diverse yet still Bitcoin-centered ETF market.
The pending approvals by the SEC, with deadlines extending into mid-2025, will significantly influence how traditional finance markets integrate crypto exposure. The approvals could lead to a more diverse range of ETFs available to investors, but Bitcoin is likely to remain a dominant player within the segment. The SEC’s decisions will shape the future landscape of the crypto ETF market, potentially allowing for more mainstream adoption and investment opportunities in the crypto space.
