92 crypto-related ETPs in the works: ‘Floodgates to open soon’
News Summary
At least 92 crypto exchange-traded products (ETPs) are awaiting a decision from the U.S. Securities and Exchange Commission (SEC), according to Bloomberg Intelligence ETF analyst James Seyffart. Solana (SOL) and XRP are the most sought-after crypto assets, with eight and seven ETF applications pending, respectively. Bloomberg Senior ETF Analyst Eric Balchunas noted that an additional 20 crypto-related ETFs have been filed in the past four months, bringing the total to 92 from 72. While three pending ETFs offer exposure to Bitcoin (BTC) and Ethereum (ETH), the majority target other altcoins. Notably, 21Shares and Grayscale are seeking approval for Ether staking ETFs, following the SEC's recent clarification that certain liquid staking activities fall outside its purview. Global asset manager BlackRock currently dominates the crypto ETF category. Its Bitcoin fund, iShares Bitcoin Trust ETF (IBIT), has seen $58.28 billion in net inflows since inception, while its Ethereum fund, iShares Ethereum Trust ETF (ETHA), has attracted $13.12 billion. A recent report suggests ETHA might soon surpass Coinbase as the largest holder of ETH, and IBIT now holds over 3% of Bitcoin's total supply. BlackRock's annual fee revenue from IBIT already exceeds that from its flagship S&P 500 fund (IVV), given IBIT's expense ratio of 0.25% compared to IVV's 0.03%.
Background
Since the U.S. SEC approved the first spot Bitcoin ETFs in early 2024, the cryptocurrency market has experienced a significant surge in institutional investment. This was further bolstered by the approval of spot Ethereum ETFs in mid-2024, enhancing mainstream financial market acceptance of crypto assets. The success of these ETFs, particularly those launched by giants like BlackRock, has demonstrated substantial market demand for regulated crypto investment vehicles. Despite the SEC's historical caution or resistance towards crypto products, its regulatory stance appears to be gradually softening due to market pressure, legal challenges (such as Grayscale's victory against the SEC), and potential political considerations, especially under the Trump administration's pro-market and innovation-friendly approach.
In-Depth AI Insights
What are the underlying drivers behind the SEC's apparent acceleration in approving crypto ETPs, particularly given past resistance? - Shifting Political and Regulatory Climate: Under President Trump's re-elected administration, there may be a greater inclination to foster financial innovation and market liberalization to maintain U.S. competitiveness in global finance. The SEC's softening stance could reflect a shift in the executive branch's view on crypto assets, aiming to avoid being perceived as stifling innovation. - Proven Market Demand and Success: The immense success of Bitcoin and Ethereum ETFs, with billions in inflows managed by firms like BlackRock, has provided the SEC with compelling evidence of genuine and substantial market demand for regulated crypto products. This success has likely allayed some of the regulators' concerns regarding market stability and investor protection. - Legal Precedent and Regulatory Clarity: Successful court challenges by firms like Grayscale against the SEC, alongside the SEC's own clarifications that certain liquid staking activities fall outside its purview, have compelled the regulator to re-evaluate its authority and approval processes, thereby paving the way for broader ETP approvals. How might the opening of