Bitwise Chief Investment Officer: Get Ready for the Crypto ETF Feast
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Bitwise Chief Investment Officer: Get Ready for the Crypto ETF Feast
The general listing standards could be approved as early as October, and their adoption may bring a large number of new cryptocurrency ETPs.
Navigating Web3 tides with focused insightsAuthor: Matt Hougan, Chief Investment Officer at Bitwise
Translation: Luffy, Foresight News
In my usual CIO memos, I try to offer insights into market dynamics. For example, last week I wrote about why it's now "Solana season," predicting that Ethereum's main rival would gain strong momentum by year-end. Since then, SOL has risen 7.72%, which is pretty good.
But watching the crypto market today feels like watching the pre-game show of the Super Bowl. With rate cuts, surging inflows into ETPs, growing concerns about the U.S. dollar, and strong momentum behind tokenization and stablecoins, the market is poised for a major rally by year-end. Yet as investors, we're mostly on the sidelines—why?
First, historically, August and September are the two worst-performing months in crypto each year. But more importantly, major developments—such as recent approvals by major brokerages for Bitcoin ETPs or progress on congressional legislation—often take time to materialize.
So while we wait, I want to share with you what’s happening behind the scenes at the U.S. Securities and Exchange Commission (SEC) regarding crypto ETP approvals. In my view, the SEC is preparing to fully open up this market.
Universal Listing Standards
Spot crypto ETPs are currently approved by the SEC on a case-by-case basis. If you want to launch a spot crypto ETP based on a new asset in the U.S. (like a Solana ETP or Chainlink ETP), you must submit a special application requesting permission to do so.
In your application, you must prove certain conditions about the market: sufficient liquidity to support the ETP, absence of market manipulation, etc.
To say the least, this takes time. The SEC's review process for each application can take up to 240 days, and even then, approval isn't guaranteed. The first spot Bitcoin ETP application was filed in 2013, but it wasn't until 2024 that the SEC approved such products. Applying has always been costly and risky.
But right now, the SEC is working on establishing "universal listing standards" for crypto ETPs. The idea is that under universal standards, any application meeting clearly defined criteria would almost certainly be approved—and quickly: applications could be approved within 75 days or less.
What are the requirements?
The SEC is still working through this and listening to input from the crypto industry. Currently, most proposals suggest that as long as the underlying asset has futures contracts trading on a regulated U.S. futures exchange, issuers should be able to launch a spot crypto ETP. Eligible futures exchanges include giants like the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (Cboe), but may also include lesser-known derivatives platforms such as Coinbase Derivatives and Bitnomial. Assuming broader lists are accepted, crypto assets that could see rapid ETP approvals soon include Solana, XRP, Chainlink, Cardano, Avalanche, Polkadot, Hedera, Dogecoin, Shiba Inu, Litecoin, and Bitcoin Cash. As more futures contracts go live, this list will likely grow.
What History Tells Us
Universal listing standards could be adopted as early as October, and their implementation could unleash a wave of new crypto ETPs. This is intuitively plausible—and history with ETFs confirms it.
Until late 2019, all ETFs followed the same case-by-case regulatory approach that spot crypto ETPs follow today. But in 2019, the SEC passed the "ETF Rule," creating universal listing standards for stock and bond ETPs. Afterward, the number of new ETF launches surged dramatically.
The chart below from ETFGI shows the number of ETFs listed annually in the U.S. Before the ETF Rule, an average of 117 new ETFs entered the market each year. Since the rule took effect, that number has more than tripled to 370 per year.
Source: Bitwise, ETFGI
As the number of ETFs grew, so did the number of ETF issuers, because launching an ETF became much easier for firms.
I expect the same thing to happen in crypto. We should see a rise in dozens of single-asset crypto ETPs and index-based crypto ETPs, and many traditional asset managers will launch spot crypto ETPs.
What This Means for Crypto Asset Prices
Investors might easily misunderstand the market impact. Simply having crypto ETPs doesn't guarantee massive inflows. You need fundamental interest in the underlying asset.
For example, spot Ethereum ETPs launched in June 2024, but didn't really start attracting capital until April 2025, when interest in stablecoins began rising. Similarly, I suspect ETPs based on assets like Bitcoin Cash will struggle to attract inflows unless the asset itself sees renewed momentum.
However, the significance of ETPs is that if fundamentals improve, assets are more likely to surge. Most global capital is controlled by traditional investors, and when ETPs exist, allocating to crypto becomes far easier for them.
There's also a bigger, perhaps harder-to-quantify point: ETPs reduce the mystique around crypto. They make crypto less intimidating to ordinary investors, more visible, and more accessible. To crypto-natives juggling a dozen wallet addresses, tokens like Chainlink, Avalanche, and Polkadot no longer sound like strange abstractions—they're ticker symbols anyone can buy in a brokerage account. This brings greater real-world attention to crypto and its many use cases. People are more likely to notice news about Chainlink partnering with Mastercard on payments, Wyoming using Avalanche to issue stablecoins, or Standard Chartered exploring Ripple's technology for cross-border payments.
The SEC adopting universal listing standards is a "coming of age" moment for crypto—a signal that we've entered the mainstream. But it's only the beginning.
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