SEC Reviews 70+ Crypto ETFs Amid Institutional Bullishness

More than 70 cryptocurrency exchange-traded funds (ETFs) are awaiting review by the US Securities and Exchange Commission (SEC) this year. These proposed ETFs encompass a wide array of assets, including altcoins, memecoins, and derivatives instruments. The list includes notable cryptocurrencies such as XRP, Litecoin, and Solana, as well as more niche assets like Penguins, Doge, and 2x Melania.

The planned listings of these funds come at a time when institutional investors are increasingly bullish on crypto as an asset class. According to a March report, a significant majority of institutions plan to increase their allocations to crypto by 2025. However, analysts caution that approval for US listings does not guarantee widespread adoption, particularly for funds holding more obscure alternative cryptocurrencies.

Eric Balchunas, an analyst, compared the approval of an ETF to a band getting its songs added to all music streaming services. While this increases visibility, it does not guarantee widespread listening or adoption. Research from Sygnum Bank suggests that altcoin ETFs may see cumulative inflows of several hundred million to $1 billion, which is significantly less than the $100 billion in net assets attracted by spot Bitcoin funds last year.

ETFs using options and other derivatives to provide structured exposure to cryptocurrencies such as Bitcoin and Ether might see more institutional uptake. Options on spot cryptocurrencies unlock numerous potential portfolio strategies for investors and could potentially catalyze significant price upside for digital assets. On April 21, ARK Invest added exposure to staked Solana to two of its existing ETFs, marking the first time spot Solana has been available to US investors in an ETF.