Following the Bitcoin and Ethereum ETFs, the cryptocurrency ETF market is experiencing a wave of expansion. Four ‘altcoin’ ETFs in the United States will bypass the standard approval process this week by using Form 8-A to list on Nasdaq and the New York Stock Exchange, covering Solana, Litecoin, and Hedera. Hong Kong has taken the lead, with China AMC’s Solana Spot ETF listed on October 27, becoming the first product of its kind in Asia.
The cryptocurrency ETF market is experiencing a wave of expansion. Following the successful launch of Bitcoin and Ethereum spot ETFs, multiple ‘altcoin’ ETFs are set to begin trading on the U.S. market this week, while Hong Kong has already taken the lead by listing a Solana ETF.
On October 28, it was reported that four ETFs tracking Solana, Litecoin, and Hedera are scheduled to list on Nasdaq and the New York Stock Exchange this week. According to Bloomberg ETF analyst Eric Balchunas, the Bitwise Solana Staking ETF, Canary Litecoin ETF, and Canary HBAR ETF will commence trading on Tuesday, while the Grayscale Solana ETF will be listed on Wednesday. These products bypassed the standard approval process by using exchange-certified Form 8-A filings, in compliance with the SEC’s adoption of the generic listing standards for commodity trusts in September this year.
Notably, the Hong Kong market has taken the lead. According to information on the China AMC (HK) official website, the Solana spot ETF issued by China AMC (HK) was listed on the Hong Kong Stock Exchange on October 27, becoming the first product of its kind in Asia and the third type of cryptocurrency spot ETF approved in Hong Kong after Bitcoin and Ethereum.
Market enthusiasm for ‘altcoin’ ETFs is rising. As previously noted by Wall Street Insights, data compiled by Bloomberg shows that approximately 130 ETF applications related to smaller cryptocurrencies are pending approval with the U.S. Securities and Exchange Commission, covering tokens such as Polkadot, Chainlink, and meme coin Pengu. This wave of applications benefits from the shift toward a more lenient regulatory environment in the U.S., with issuers seeking to replicate the success of Bitcoin and Ethereum ETFs.
Bypassing conventional approval processes to accelerate listings
The rapid listing of four ‘altcoin’ ETFs has surprised market observers. These products achieved listing through Form 8-A certification by the NYSE and Nasdaq, providing issuers with an alternative path to bypass the recent ETF approval process.
Issuers submitted these forms to the SEC to register specific securities under the Securities Exchange Act of 1934. Canary noted that these funds comply with the generic listing standards for commodity trusts adopted by the SEC in September.
The listing of these ETFs ends months of speculation about when trading would begin.
The U.S. government shutdown added complexity to the situation. In an operational contingency plan released on October 1, the SEC stated it would ‘not review or approve’ product applications nor provide other ‘non-emergency support’ to registrants.
Bloomberg analysts had previously predicted that the SEC would approve Solana and other altcoin ETFs at the beginning of this month, assigning a 100% probability to the approval of SOL products, with other funds’ probabilities also close to that level.
Steven McClurg, CEO of Canary, stated in a press release that the launch of Litecoin represents “another milestone moment in a pivotal year for the cryptocurrency industry.” He commented:
“Litecoin has demonstrated a proven track record of security and reliability, with significant enterprise-level use cases. We are proud to offer investors SEC-registered tools to gain exposure to this important digital asset.”
Solana, Litecoin, and Hedera are the 6th, 29th, and 30th largest digital assets globally, respectively. Solana’s market capitalization exceeds $111 billion, with its recent trading price above $199, representing a 0.5% increase over the past 24 hours. Litecoin and Hedera have recently risen by 3.6% and 1.9%, respectively.
Hong Kong Takes the Lead in Launching Solana Products
Hong Kong has gained a head start in the “altcoin” ETF sector.
The spot Solana ETF launched by China AMC (HK) was listed on October 27, becoming the first product of its kind in Asia. Earlier, Brazil became the first country to launch a spot Solana ETF in 2024, and Canada also approved a spot Solana ETF in April this year.
The ETF’s virtual asset trading platform is operated by OSL Exchange, with OSL Digital Securities serving as the sub-custodian. China AMC (HK)’s management fee is 0.99%, while the custody and administrative fees are capped at 1% of the sub-fund’s net asset value.
Known for its high throughput and low transaction fees, this public blockchain has made significant progress in decentralized finance, NFTs, and Web3 applications since its launch in 2020.
However, SOL’s price performance this year has not been remarkable, with the latest price at $187.75, representing a decline of approximately 36% from its yearly high of $295.6.
According to the Huaxia Times, Zhai Dan, General Manager of Xinhuo Private Investment Fund Management Co., Ltd., stated that the listing of SOL ETF will provide institutional investors with a compliant and convenient channel to participate in the cryptocurrency market, while lowering the entry barrier for individual investors and enhancing market liquidity.
130 ‘Altcoin’ ETFs Are in the Queue for Approval
As mentioned in a Wall Street Wisdom article, Wall Street’s layout of ‘altcoin’ ETFs is accelerating. Data compiled by Bloomberg shows that approximately 130 ETF applications related to smaller cryptocurrencies are awaiting SEC approval, covering tokens such as Cardano, Avalanche, and Dogecoin.
Many of these applications were submitted during a period of optimistic market sentiment months ago. Under a more relaxed regulatory environment, issuers have become bolder, with some applications even including double-leveraged instruments linked to cryptocurrencies associated with Trump and Melania.
Jane Edmondson, Head of Index Product Strategy at TMX VettaFi, stated: “While predicting altcoin winners is difficult, issuers are taking advantage of the more favorable regulatory environment for crypto products to gain an early lead.”
However, she expressed caution about whether this wave of applications corresponds to the level of investor interest.
James Seyffart, an ETF analyst at Bloomberg Intelligence, described this phenomenon as the ETF industry’s ‘spaghetti cannon’ strategy:
“They fire off a lot of these products and see which ones stick to the wall. Many will likely end up failing, but ultimately, the market and investors will decide which products create value.”
Market Volatility Tests Product Value
‘Altcoin’ ETFs face challenges from the volatility of underlying assets.
China AMC (HK) noted in its risk advisory that SOL, as a digital asset, has a limited history and has exhibited extremely high price volatility.
For instance, the price of SOL fell by approximately 96% between November 7, 2021, and January 1, 2023. Investments linked to SOL may be significantly more volatile compared to traditional securities investments.
Ilan Solot, Senior Global Market Strategist at Marex Solutions, stated that packaging altcoins as ETFs faces substantial obstacles—ranging from shallow liquidity, token dilution, to small market capitalization sizes.
“Thousands of ETFs have been launched with no sustainability. I suspect only a few of these products will see meaningful inflows.”
