SEC's Generic Rules Spark Crypto ETF Surge, Boosting Altcoin Exposure

The U.S. Securities and Exchange Commission (SEC) has approved the Hashdex Nasdaq Crypto Index US ETF (NASDAQ: NCIQ) to include additional cryptocurrencies, expanding its holdings beyond Bitcoin (BTC) and Ethereum (ETH) to encompass XRP, Solana (SOL), and Stellar (XLM) under newly adopted generic listing standards [1]. This marks the first U.S. ETF to hold Stellar alongside major altcoins like XRP and Solana, signaling a significant step toward broader crypto diversification in regulated investment vehicles [3]. The updated portfolio allocates 73.5% to Bitcoin, 14.8% to Ethereum, 7.1% to XRP, 4.2% to Solana, and 0.3% to Stellar [2]. The approval follows the SEC’s September 17, 2025, rule change, which streamlined the approval process for crypto ETFs by eliminating the prior 19b-4 review, reducing the timeline from 270 days to 75 days [4].

The new framework allows qualified ETFs to bypass the case-by-case review process if they meet criteria such as trading on a regulated exchange, having CFTC-regulated futures contracts, or replicating an existing ETF with direct asset exposure [4]. This shift has spurred a surge in filings, with asset managers preparing for a wave of launches. Steven McClurg, founder of Canary Capital Group, noted that “we’ve got about a dozen filings with the SEC now, and more coming,” anticipating a “boom time” for crypto ETFs in Q4 2025 [1]. Analysts project that ETFs tracking XRP and Solana could debut as early as October 2025 [3].

The Hashdex ETF’s expansion reflects growing institutional confidence in altcoins. Nate Geraci of NovaDius Wealth Management highlighted the fund’s role in providing “broader exposure to a range of crypto assets” [4]. The inclusion of XRP and Solana follows recent regulatory developments, including the REX-Osprey XRP ETF’s successful launch, which generated $37.5 million in volume on its first day [5]. Franklin, 21Shares, and Canary are among firms preparing similar XRP-focused ETFs, with the SEC facing a critical deadline in October to approve pending applications [5].

Market participants remain cautious about demand for altcoin ETFs, however. Kyle DaCruz of VanEck warned that “there will be a flood of tokens that many folks have never heard of,” emphasizing the need for investor education [8]. The SEC’s streamlined process has also drawn comparisons to historical ETF trends: when generic listing standards were introduced for stocks and bonds in 2019, annual U.S. ETF launches jumped from 117 to over 370 [9]. Similar growth could follow in the crypto space, with Grayscale’s CoinDesk Crypto 5 ETF (GDLC.P) already leveraging the new rules to include XRP, Solana, and Cardano [8].

The broader implications of the SEC’s move extend beyond the Hashdex ETF. The agency’s adoption of generic standards aligns with a global trend toward crypto regulation, including Europe’s MiCA framework, which harmonized rules across the EU in late 2024 [10]. For the U.S., the shift from enforcement-led oversight to a deregulatory approach—dubbed “Project Crypto” by SEC Chair Paul Atkins—signals a pivotal moment for institutional adoption. Bitwise’s Teddy Fusaro called the change “a coming of age” for crypto, noting that the new rules “remove the last remaining hurdle to dozens of new spot ETFs tied to cryptocurrencies ranging from Solana to Dogecoin” [7].

While the immediate focus is on XRP and Solana, the long-term success of these ETFs will depend on market dynamics. PUMP token’s aggressive buyback program, though unrelated, illustrates the potential for tokenomics to influence investor sentiment [6]. However, for altcoin ETFs, the key challenge lies in balancing innovation with regulatory clarity. As DaCruz noted, “instead of years as with Bitcoin, there will be weeks or months to provide that education” [8].