- The SEC is working on a new set of guidelines for exchange-traded funds.
- Donald Trump has appointed pro-crypto regulators since taking office.
- Now, new crypto exchange-traded funds are ready to hit the market.
Get ready, Wall Street.
The US Securities and Exchange Commission is working on “generic listing standards” for crypto exchange-traded products.
The fresh rules will allow new crypto ETFs to launch automatically if they meet basic requirements.
It’s a quiet yet powerful regulatory shift that has the potential to open the door to dozens of new funds, and billions in inflows.
“The SEC is getting ready to blow the market wide open,” Bitwise CIO Matt Hougan, wrote in a Monday note to investors. “The SEC adopting generic listing standards is a ‘coming of age’ moment for crypto, a signal that we’ve reached the big leagues.”
Spot Bitcoin ETFs have already proved the viability of the crypto ETF concept. Led by BlackRock, the 11 providers have amassed a staggering 1.3 million Bitcoin worth about $149 billion. That’s about 6% of the network’s total supply.
Meanwhile, Ethereum ETFs, which got off to a slow start, have turned a corner with hundreds of millions pouring in over the past weeks.
Their success has investors salivating over the next wave. Traders and asset managers are hopeful the SEC’s generic listing standards will speed the approval of new products tied to XRP, Solana, and other top tokens.
One by one
SEC approvals take time, especially in crypto.
Issuers file petitions, prove that markets are liquid and resistant to manipulation, and then wait as much as 240 days for a decision.
Crypto is a nascent market prone to manipulation by large players. As such, the SEC had been cautious when approving new ETF products. The first spot Bitcoin ETF took more than a decade to win approval.
But generic listing standards would change all of that. Under the proposal, any crypto ETF meeting preset criteria would be greenlit in 75 days or fewer.
What would these criteria be?
“The SEC is still working through that and accepting input from the industry,” wrote Hougan. But what we know for now is that the agency will require an existing futures contract for the underlying asset trading on a regulated US futures exchange.
ETF history suggests the impact will be dramatic.
When the SEC introduced generic standards for stock and bond ETFs in 2019, annual launches in the US jumped from an average of 117 to more than 370, according to Hougan.
The number of issuers ballooned as well, as it became push-button easy to launch new funds.
Pro-crypto pivot
The timing lines up with a broader pro-crypto pivot in Washington.
SEC Chair Paul Atkins has already declared that “crypto’s time has come,” pledging to end years of enforcement-first oversight and launch a deregulatory blitz known as Project Crypto.
Atkins wants “clear, predictable rules of the road” and says the agency will modernise securities laws to accommodate tokenisation, staking, and even all-in-one “super-apps” for digital assets.
Still, there are other options for launching crypto ETFs without going through all the hoops.
Just last week, a Dogecoin ETF used a regulatory workaround dubbed the Investment Company Act of 1940 to circumvent some of the SEC’s approval requirements.
Now, the fund could start trading immediately, though it faces stiff marketing restrictions.
Analysts called it the beginning of the memecoin ETF era.
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got at a tip? Email him at psolimano@dlnews.com.
