Why crypto ETF launch timelines remain up in the air
SEC’s anticipated generic listing standards might not come until October, person close to the filings predicts
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Let’s take a few minutes to address the latest developments in crypto ETF land.
Yesterday, the SEC delayed its decision on Fidelity’s spot solana ETF proposal. Not surprising — but a reminder that the regulator needs to sort out more before approving those.
The SEC’s engagement with issuers last month spurred optimism of possible ahead-of-schedule rulings (before October deadlines). And I confirmed with a person close to the filings that the SEC got back to the asset managers about their latest amendments — giving them until July 31 to respond to the agency’s new questions about “how the product will be structured.”
But that person also told me the SEC could very well be waiting to develop the anticipated “generic listing standards” before greenlighting SOL funds. Though SEC staff has asked exchanges to offer feedback on those drafts, the person said, their current expectation is for those to come closer to (or in) October — not sooner.
No one I’ve spoken to is particularly confident on timelines, given we’re essentially in uncharted territory. It’s worth noting, however, that SEC Commissioner Hester Peirce has urged patience on several occasions. So I doubt the SEC will rush to judgment.
Switching gears, I had written last week about the SEC approving NYSE Arca’s 19b-4 to list the Grayscale Digital Large Cap Fund (GDLC) on its exchange as an ETF.
But a corresponding July 1 letter — from the SEC’s deputy secretary to NYSE Group’s senior counsel — said that order was “stayed” until the regulator says otherwise.
In case you missed it, a Grayscale spokesperson told me: “While this development was unexpected, it reflects the dynamic and evolving nature of the regulatory landscape surrounding a first-of-its-kind digital asset product like GDLC.”
The firm is still pursuing the GDLC listing. Just as Bitwise still looks to convert its Bitwise 10 Crypto Index Fund (BITW) to an ETF and Hashdex wants to add assets to its Nasdaq Crypto Index US ETF (NCIQ).
We don’t have an update on the Bitwise and Hashdex proposals. So we’re in a bit of a holding pattern.
That didn’t stop Yorkville America Digital (in partnership with Trump Media and Technology Group) from filing for a Truth Social Crypto Blue Chip ETF on Tuesday. That fund’s expected holdings would be bitcoin (70%), ether (15%), solana (8%), cronos (5%) and XRP (2%).
A spokesperson did not immediately comment on the rationale behind those proposed allocations (or cronos’ inclusion), though we do know Crypto.com (a partner of Trump Media) developed the Cronos blockchain. CRO’s market cap this morning ranked 44th among crypto assets, according to CoinGecko.
To summarize, the paperwork progress hasn’t yet led to launches. Well, except for the REX-Osprey SOL Staking ETF (a product structured differently than traditional crypto trusts).
As for the spot crypto ETFs trading, the US bitcoin products have been on an inflow tear. Those funds have seen net inflows on 18 of the last 19 trading days (totaling $5.6 billion over that span). The segment sits on the $50 billion net inflow precipice, according to Farside Investors.
What about US ETH ETF inflows from June 9 to July 7? A respectable $1.1 billion.
Overall, we’re up to 12 straight weeks of inflows for crypto investment products, CoinShares data shows — pushing AUM to a record $188 billion.
I’m curious what sort of demand we see for other single-asset crypto ETFs once they go live in the US. Some believe the bigger opportunity is those crypto index funds — tailored for investors who don’t want to spend the time trying to pick individual winners.
I’d say that take makes sense, but we’ll see what the market thinks soon enough.
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