The Crypto Industry's "Coming of Age": SEC Opens the Gates, Wall Street's "ETP Feast" Begins
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The Crypto Industry's "Coming of Age": SEC Opens the Gates, Wall Street's "ETP Feast" Begins
The "highway" that the SEC has paved for crypto ETPs is undoubtedly a watershed moment in the history of crypto asset development.
Navigating Web3 tides with focused insightsAuthor: Blockchain Talk
On September 17, 2025, the U.S. Securities and Exchange Commission (SEC) made a decision that appeared mundane but was in fact historic: it approved a "universal listing standard" for exchange-traded products (ETPs) tied to spot commodities—including digital assets.
To outsiders, this may seem like just another technical news item. But to believers, developers, and investors who have long navigated the crypto world, it was nothing short of a thunderclap. SEC Chairman Paul S. Atkins’ official statement sounded restrained and professional: "This action aims to maximize investor choice and foster innovation by streamlining the listing process."
The market’s interpretation, however, was far more direct and enthusiastic: the era of "ETPalooza"—an ETP bonanza—has arrived.
What does this wave truly signify? What financial alchemy lies behind the cryptic term "ETP"? And more importantly, with regulatory green lights now on, how will this capital feast completely reshape the landscape of the crypto world?
01 Your "Crypto ETF" Isn't a Real ETF
To understand this transformation, we must first decode Wall Street's alphabet soup. The commonly used term "crypto ETF" is actually an umbrella term, concealing different product structures and risks.
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ETP (Exchange-Traded Product): This is the overarching category for all such products. They trade on exchanges like stocks, offering real-time liquidity.
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ETF (Exchange-Traded Fund): The "model student" of the family. It is a true fund that directly holds a diversified basket of underlying assets (e.g., stocks or bonds). In the U.S., most ETFs are strictly regulated under the Investment Company Act of 1940, which mandates diversification and provides the highest level of investor protection.
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ETC (Exchange-Traded Commodity): A structure tailored specifically for cryptocurrencies. Since Bitcoin or Ethereum are single assets, they fail to meet the 1940 Act’s requirement for diversification. Therefore, a "spot Bitcoin ETP" cannot legally register as a standard ETF. Its actual structure resembles an ETC—a debt security backed by physical ownership of a single commodity, such as gold or Bitcoin.
Key distinction: When you purchase a so-called "spot Bitcoin ETF," you're not buying a diversified fund fully protected under the 1940 Act. Instead, you're investing in a trust product tracking a single asset, structured more like an ETC. While it trades on a regulated exchange, its internal regulatory safeguards and risk profile are fundamentally different from traditional stock ETFs.
02 The Revolutionary Shift in SEC Approval
The SEC’s new rule effectively upgrades the issuance of crypto ETPs from a slow, muddy path of manual review to a clear, high-speed highway.
The Old World: Long Delays
In the past, every spot crypto ETP had to submit individual applications to the SEC, a process that could take up to 240 days with no guarantee of approval. Issuers were required to prove they could "prevent fraud and market manipulation"—a very high bar.
The New Era: The Highway Opens
The new "universal listing standard" changes everything. Now, if a crypto asset meets predefined criteria, its related ETP can go straight to listing, cutting the timeline down to 60–75 days.
For the crypto industry, the most critical criterion is this: the asset must have futures contracts trading for at least six months on a market regulated by the U.S. Commodity Futures Trading Commission (CFTC). The SEC’s move is clever—it leverages the work of its sibling regulator, using a mature futures market as proof of the underlying spot market’s health.
The "Green List" Emerges and Key Roles Clarified
Under this new rule, a "green list" immediately emerges. Any crypto asset whose futures have traded for over six months on Coinbase Derivatives—a CFTC-regulated exchange—automatically qualifies for the fast track. The list includes: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Litecoin (LTC), Dogecoin (DOGE), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Stellar (XLM), and Ripple (XRP).
It’s important to clarify: the SEC’s approval applies to traditional securities exchanges like Nasdaq, Cboe, and NYSE Arca—the "storefronts" where end investors buy and sell ETP shares.
So what is Coinbase’s role? It acts as the upstream "qualification hub." A crypto asset earns its fast-track eligibility only after its futures contract has demonstrated six months of solid trading activity on Coinbase Derivatives, a CFTC-regulated platform.
In short: Coinbase’s compliant futures market is the "litmus test," while Nasdaq and other exchanges serve as the final "trading venues."
03 The ETP Bonanza Begins
The SEC’s decision has opened Pandora’s box, triggering ripple effects that will send shockwaves across every corner of the market.
1. Capital Reshaping: A Multi-Billion Dollar Conduit
In just one year after launch, the first spot Bitcoin ETPs attracted over $36 billion in net capital inflows. This demonstrates the enormous pent-up demand among investors. Many traditional investors want exposure to crypto but are deterred by technical barriers like managing private keys and using wallets.
Now, ETPs provide the perfect bridge. Investors can use their familiar brokerage accounts to buy Solana or Chainlink with a single click, just like buying Apple stock. Analysts predict that over 100 crypto ETPs could launch within the next 12 months, potentially fueling a massive bull market driven by mainstream capital.
2. Structural Reshaping: Crypto Markets Get a "Wall Street Clock"
The rise of ETPs is fundamentally altering the heartbeat of the crypto market.
The "4 PM Effect": Because ETP issuers need to calculate their net asset value around 4 PM New York time, they must actively buy or sell real crypto assets around that hour. This causes a predictable, massive spike in trading volume on exchanges like Coinbase every day at that time. The crypto market’s original 24/7 nature is being gradually "tamed" to align with Wall Street’s schedule.
The Return of "In-Kind Creation/Redemption": Recently, the SEC finally approved the "in-kind" creation and redemption mechanism. This allows major market makers to exchange a basket of actual Bitcoin for ETP shares, rather than using cash. This is the standard practice for mature ETFs and significantly reduces costs while improving efficiency.
3. Power Reshaping: Coinbase’s Transformation and the Exchange "New War"
The rise of ETPs is rewriting the survival rules for crypto exchanges. For U.S.-based compliance giants like Coinbase, this presents both risk and opportunity.
The "risk" lies in the fact that as investors gain easy access to crypto products through traditional brokers, a portion of Coinbase’s retail trading fee revenue will inevitably be diverted.
The "opportunity," however, is far greater. Coinbase is rapidly transforming into the "arms dealer" for the entire ETP ecosystem. It provides critical custody, market data, and surveillance services to nearly all major ETP issuers, opening up a lucrative and stable B2B institutional business frontier.
In contrast, exchanges with weaker footholds in the U.S. regulatory framework will find themselves on the defensive in the race for these emerging institutional revenues. A new war centered on institutional services has already begun.
04 Summary
The "highway" the SEC has built for crypto ETPs is undoubtedly a watershed moment in the history of digital assets.
Yet this is merely the prologue, not the final chapter. As crypto markets become increasingly intertwined with traditional finance, they will grow ever more sensitive to macroeconomic data, Federal Reserve policy, and global risk sentiment. For those of us navigating this space, one thing is certain: the rules of the game have changed. Understanding the rules, embracing change, and maintaining a healthy respect for risk will remain the ultimate principles for survival and success in this thrilling industry.
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