SEC's Streamlined Rules Drive Crypto ETF Surge, Expanding Investor Access

The U.S. Securities and Exchange Commission’s (SEC) recent approval of generic listing standards for cryptocurrency-based exchange-traded products (ETPs) has accelerated the launch of diversified crypto funds, with WisdomTree registering a top 20 crypto index fund that includes XRP, Solana (SOL), and Cardano (ADA) title5^[5]. The fund, filed under the Investment Company Act of 1940, bypasses the traditional 19b-4 approval process, enabling a 75-day review period for exchanges to list the product title10^[10]. This development follows the SEC’s July 2025 decision to streamline ETP approvals, requiring only the existence of qualifying futures contracts on designated markets for at least six months title3^[3]. The framework has already enabled the launch of spot ETFs for XRP, Solana, and Dogecoin by REX Financial and Osprey Funds title1^[1].

WisdomTree’s CoinDesk 20 Fund, registered in Delaware, tracks the top 20 cryptocurrencies by market capitalization and liquidity. The basket includes Bitcoin (BTC), Ethereum (ETH), XRP, Solana, Cardano, Chainlink (LINK), Sui, Hedera Hashgraph (HBAR), and 12 other assets title5^[5]. The fund’s structure aligns with the SEC’s new rules, which permit ETPs to list directly on exchanges without individual SEC reviews, provided they meet predefined criteria. Bloomberg Intelligence analyst James Seyffart anticipates over 100 crypto ETFs launching within 12 months under the streamlined framework title2^[2].

Market reactions to the fund’s registration were immediate. XRP, Solana, and Cardano prices rose 2–7% in the 24 hours following the announcement, with XRP reaching $2.85 and trading volume increasing by 94% title5^[5]. The move reflects growing institutional interest in crypto assets, as highlighted by BlackRock’s Ethereum ETF attracting $21.5 billion in assets under management in July 2025 title3^[3]. WisdomTree’s filing also signals a shift in regulatory tolerance, with the SEC approving in-kind creation and redemption mechanisms for crypto ETPs in July, reducing costs and improving efficiency for investors title3^[3].

The SEC’s generic listing standards have sparked debate. While proponents argue the rules will democratize access to crypto investments, critics like Commissioner Caroline Crenshaw warn of insufficient investor protections for ETPs compared to traditional ETFs title8^[8]. The distinction between 1933 Act ETPs and 1940 Act ETFs remains a point of contention, as the former lacks oversight from independent boards and custody safeguards title8^[8]. Despite these concerns, the SEC’s July 2025 decision to permit in-kind redemptions for Bitcoin and Ethereum ETPs has been praised for its tax advantages for institutional investors title3^[3].

WisdomTree’s fund is part of a broader surge in crypto ETF activity. Over 90 applications for funds tracking altcoins are pending SEC approval, with Bloomberg Intelligence assigning 95% approval odds for Solana, XRP, and Litecoin ETFs by year-end title3^[3]. The SEC’s September 2025 approval of the REX-Osprey Solana Staking ETF (SSK) further underscores its openness to innovation, marking the first U.S. ETF to include staking rewards title11^[11]. As exchanges like Nasdaq, NYSE Arca, and Cboe BZX prepare to list new ETPs, the market anticipates a wave of products catering to both retail and institutional investors.