The US Securities and Exchange Commission (SEC) is preparing to simplify the approval process for crypto exchange-traded products (ETPs), a move that could trigger a surge in new offerings. However, according to Bitwise Chief Investment Officer Matt Hougan, streamlined listings don’t guarantee success.
In a report published Monday, Hougan said the adoption of generic listing standards — potentially as early as October — will likely “usher in a ton of new crypto ETPs.” He noted that history with exchange-traded funds (ETFs) supports the expectation of increased product launches.
Still, Hougan cautioned that “the mere existence of a crypto ETP does not guarantee significant inflows.” He emphasized that success depends on fundamental investor interest in the underlying asset. For example, ETFs tied to assets such as Bitcoin Cash may struggle unless those tokens experience renewed momentum.
Hougan highlighted that while new ETFs may not spark immediate demand, they position the market for stronger inflows when fundamentals shift, since ETFs make crypto exposure more accessible for traditional investors.
This sentiment aligns with concerns raised earlier this year. In February, Sygnum research head Katalin Tischhauser told Cointelegraph that enthusiasm over ETFs often outpaces the actual demand behind them.
Recent history provides mixed results. On July 3, the US’ first Solana staking ETF launched with $12 million in first-day inflows, which Bloomberg ETF analyst James Seyffart described as a “healthy start.”
Currently, the SEC reviews spot crypto ETFs individually, requiring issuers to prove that the underlying markets are sufficiently liquid and resistant to manipulation. This process can take up to 240 days and does not guarantee approval.
Under the new streamlined process, however, applications would be “virtually guaranteed” approval if they meet strict requirements. Hougan noted that approvals could be issued in 75 days or less, significantly accelerating access.
Meanwhile, Bitfinex analysts recently suggested that broader altcoin rallies may only emerge once crypto ETFs expand investor exposure further along the risk curve.
For now, while the SEC’s updated rules could open the floodgates for more crypto ETFs, Bitwise and other market observers stress that sustained inflows depend on investor appetite, not regulatory greenlights alone.
