Regulators Open Door to Crypto ETFs with New Streamlined Framework

The U.S. Securities and Exchange Commission (SEC) has approved new generic commodity trust rules that could significantly streamline the approval process for Bitcoin and other cryptocurrency-based exchange-traded funds (ETFs). The final rule, published on September 18, 2025, introduces a standardized framework for commodity-based investment vehicles, eliminating the need for case-by-case evaluations for products that meet predefined criteria.

The new framework is expected to reduce regulatory uncertainty and approval timelines for asset managers seeking to launch cryptocurrency ETFs. According to the SEC, the rule is modeled after existing structures for precious metals and energy commodity ETFs, but now extends to digital assets that qualify as commodities under the Commodity Exchange Act. This development follows years of legal and regulatory battles over whether cryptocurrencies should be classified as securities or commodities.

Market observers have noted that the ruling aligns with recent enforcement actions and statements from SEC Chair Gary Gensler, who has consistently emphasized the importance of applying existing regulatory frameworks to new asset classes where appropriate. While the decision does not guarantee approval for specific Bitcoin ETF products, it significantly lowers the regulatory hurdles that have previously delayed or blocked such offerings.

Several major financial institutions, including BlackRock, Fidelity, and Ark Invest, have already submitted applications for Bitcoin ETFs, and industry analysts anticipate that the new rules will accelerate the processing of these and other similar applications. The approval is also expected to pave the way for ETFs based on other cryptocurrencies such as Ethereum, provided they meet the necessary commodity classification standards.

The impact of the SEC’s decision could extend beyond ETFs to broader institutional adoption of digital assets. Analysts have pointed out that the streamlined framework could encourage more traditional asset managers to incorporate crypto-related products into their portfolios, further legitimizing the sector and attracting mainstream investors. This shift may also contribute to greater price stability and liquidity for cryptocurrencies as they become more integrated into conventional financial markets.

Critics of the ruling, however, caution that the move could expose investors to new risks, particularly if the underlying digital assets are volatile or lack adequate regulatory safeguards. The SEC has not mandated additional investor protection measures as part of the new framework, leaving compliance with existing commodity trading rules as the primary regulatory safeguard.

The approval of the generic commodity trust rules marks a pivotal moment in the ongoing evolution of U.S. crypto regulation. While the SEC has not yet issued a final decision on any specific Bitcoin ETF, the agency’s action signals a more accommodative stance toward digital asset products that fit within existing regulatory categories. This development is expected to fuel continued debate over whether further reforms are needed to address the unique characteristics of cryptocurrencies.