The Crypto ETF race has been overdrive. On Friday, Rex’s stock and Osprey Fund removed filing of funds trading on 21 new exchanges from hedera (hbar) and Bitcoin Cash (BCH) Some people have built staking into new names like SUI and hype. DefianceETFs were also piled up, seeking approval for leveraged crypto and funds from Tesla and Amazon. As James Seyfert of Bloomberg said, “Things are getting wild.”
What happened?
On Friday, floods were seen filed on cryptocurrency-related exchange trading funds (ETFs). Rex stocks and Osprey Funds proposed 21 ETF prospectus covers everything from Hedera Hashgraph (HBAR) to Bitcoin Cash (BCH), SUI, and even products called Hype. Many of these proposals also include staking features that could change the way investors get yields from ETFs.
Defiance ETF also took part in the raceSubmit leveraged ETF applications that cover not only cryptography but also traditional technology names such as Tesla and Amazon. Bloomberg Intelligence Analyst James Seyfert simply summed it up as “things are wild.”
Why is the SEC important here?
The US Securities and Exchange Commission (SEC) is the ultimate gatekeeper for these products. Recently, the agency approved listing standards proposed by three exchanges. These changes mean that dozens of cryptographic ETF applications do not have to go through the slow running 19B-4 process, and have historically drawn timelines for several months. In other words, the road to launch has become short and smooth.
This change in regulations is extremely important, especially as SEC sits in the backlog of ETF applications associated with tokens such as Doge, XRP, and LTC. Since Trump took office, friendly attitudes from regulators have created the most advantageous environment ever for crypto ETFs.
What can delay startup?
This is the catch. The US government closed Wednesday after Congress refused to agree to fundraising. Shutdowns have stopped most of the SEC’s work and limited resources to the agency. This means that ETF submissions could stall until the government reopens.
Some ETFs already in the pipeline were approaching the deadline for decisions in the coming weeks. Those deadlines may slip without active staff moving forward with the paper. Everything is effectively on hold unless SEC’s chairman, Paul Atkins, prioritizes the Crypto ETF and tells staff to quickly track short-term approvals.
What does this mean for investors?
Once these ETFs finally cleared the SEC desk, investors were able to see one of the widest range of crypto ETFs ever offered in the US market. Access to not only Bitcoin and Ethereum, but also assets such as Hedera and Bitcoin Cash, as well as new projects such as SUI and hype could be regulated. Adding a staking component will further expand the appeal as investors could potentially gain both price exposure and yields with regulated rappers.
But timing is everything. The green light of regulations is closer than ever, but political shaking could slow the party. For now, investors and issuers alike are waiting to see how quickly Washington will return to work.
