The U.S. Securities and Exchange Commission (SEC) is preparing to simplify how crypto exchange-traded products (ETPs) get listed — a move that could open the door to a wave of new funds. But according to Bitwise’s chief investment officer, Matt Hougan, investors shouldn’t assume that every new product will automatically attract money.
Hougan explained in a recent note that if the SEC introduces standardized listing guidelines — possibly as early as October — it would likely result in “a flood” of crypto ETFs. He pointed out that similar regulatory shifts in the past led to rapid growth in traditional ETF markets.
Still, Hougan cautioned that the mere launch of a crypto ETF doesn’t mean investors will rush in. “For an ETF to succeed, there has to be genuine interest in the underlying asset,” he said, adding that funds tied to lesser-used tokens, such as Bitcoin Cash, may struggle unless those assets gain renewed relevance.
That said, ETFs remain important infrastructure. They make it easier for mainstream investors to allocate money to crypto once market conditions improve, Hougan noted.
Other industry voices share a similar view. Earlier this year, Sygnum’s head of research, Katalin Tischhauser, said that while there’s plenty of excitement around ETF launches, the actual sources of demand remain unclear.
Meanwhile, new products continue to enter the market. Two U.S.-listed ETFs tracking XRP and Dogecoin are expected this week, and Solana’s first staking ETF drew $12 million on its debut in July — a result Bloomberg analyst James Seyffart described as “healthy.”
Currently, the SEC handles spot crypto ETF applications individually, requiring issuers to prove that the token’s market is both liquid and resistant to manipulation. Reviews can drag on for up to 240 days, with no guarantee of approval.
The upcoming rules would change that. If an application meets the new criteria, approval would be almost automatic, and the process could be cut down to around 75 days.
Even so, analysts at Bitfinex recently warned that altcoins are unlikely to see a broad rally until ETFs offering exposure to riskier digital assets receive approval.
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