Traders and investors have been eagerly anticipating the arrival of altcoin ETFs, even as the recent U.S. government shutdown has slowed the regulatory review process.
Despite these delays, filings for cryptocurrency-based exchange-traded products continue to pour in.
As of October 20, there are 155 crypto ETP proposals covering 35 different digital assets, according to Bloomberg. Leading the charge are Solana and Bitcoin, each with 23 proposals, followed by XRP (20) and Ethereum (16).
Government Shutdown Slows Approvals, But Optimism Remains
The shutdown, which began on October 1, has caused a temporary bottleneck in the review process. However, experts remain confident that approvals are imminent. Eric Balchunas, senior ETF analyst at Bloomberg, noted that the market could see over 200 crypto ETPs launch within the next 12 months, describing the rush of filings as a “total land grab.”
In recent weeks, issuers have submitted proposals for 2x and 3x leveraged ETFs, as well as products incorporating staking features, taking advantage of newly approved listing standards for commodity-based trusts. Many filings include variations of Bitcoin exposure, such as leveraged or covered-call strategies, allowing investors to gain customized exposure to the asset.
The Rise of Diversified Crypto ETFs
Industry observers expect that most traditional investors will prefer diversified, index-based, or actively managed ETFs over single-token products. Nate Geraci, president of NovaDius Wealth Management, said, “No way traditional finance investors are ready to navigate all these single tokens. They’ll take a diversified, shotgun approach to this emerging asset class.”
Spot ETFs for Bitcoin and Ethereum went live in January and July 2024, respectively, and have already attracted significant assets under management – $150 billion for BTC ETFs and $24 billion for ETH ETFs, according to The Block’s data.
With the combination of high demand, a flood of new filings, and previous successes, the stage is set for the U.S. market to expand its regulated crypto investment options substantially once the government reopens.
