There’s a quiet hum in the crypto market, a shift in the regulatory winds that feels almost too good to be true. For months, we’ve watched the dance between crypto issuers and the Securities and Exchange Commission, a slow, often frustrating waltz. Now, it seems the music has changed, and the tempo has picked up considerably.
- Bloomberg Senior ETF Analyst Eric Balchunas now believes the odds of approval for several new spot crypto ETFs in the U.S. are 100%. This marks a significant increase from previous optimistic predictions.
- New “generic listing standards” from the SEC have effectively bypassed the old 19b-4 filing process, streamlining the approval timeline for crypto ETFs. The focus now shifts to S-1 registration statements.
- This regulatory shift is expected to lead to a substantial increase in crypto ETF launches, potentially tripling the number of new products entering the market.
Balchunas Senior ETF Analyst Eric Balchunas, a man who tracks these things with a keen eye, recently shared a rather striking update. He now believes the odds of approval for several new spot crypto exchange-traded funds (ETFs) in the U.S. are, well, 100%. That’s a bold claim, especially for an industry used to cautious predictions.
Balchunas posted his thoughts to X, stating, “Honestly, the odds are really 100% now.” He was talking about products like Litecoin, Solana, and XRP ETFs. This marks a jump from Bloomberg’s earlier, still optimistic, 90% to 95% chance of approval by year-end.
So, what changed? It boils down to something called “generic listing standards.” These new rules, according to Balchunas, make the old 19b-4 filings and their associated “clock” effectively meaningless. Think of it like a new express lane opening on a busy highway. The old traffic lights just don’t matter as much anymore.
What remains, then, are the S-1 registration statements. These are the forms filed by the issuers themselves, and they’re now just waiting for a formal green light from the SEC’s Division of Corporation Finance. Balchunas even pointed out that Solana’s S-1 has already seen its fourth amendment. “The baby could come any day,” he quipped. “Be ready.”
We’d seen deadlines looming for these potential approvals. Litecoin’s was set for October 2, Solana’s for October 10, and XRP’s for October 17. But with these new standards, the SEC can now approve or deny them at any time, without the pressure of those specific dates.
Balchunas, alongside fellow Bloomberg ETF Analyst James Seyffart, had already raised the approval odds to 95% back in June for Litecoin, Solana, and XRP ETFs. They also included a range of crypto index ETF products in that higher probability. Other digital assets, like Dogecoin, Cardano, Polkadot, Hedera, and Avalanche, saw their chances increase to 90% at the same time.
To understand this shift, it helps to know a bit about the old process. The 19b-4 filings were one part of a two-step application. Exchanges like Nasdaq, NYSE Arca, and Cboe BZX filed these on behalf of the crypto ETF issuers. If the SEC acknowledged them and published them on the Federal Register, that started a countdown, a deadline clock.
The other important form, the S-1 registration statement, is filed by the issuers. This form doesn’t trigger any deadlines. It’s more about the nitty-gritty details of the fund itself. The recent change means the 19b-4 step is largely bypassed, streamlining the path forward.
Balchunas’s comments came after a wave of recent 19b-4 withdrawals. The SEC’s website shows these withdrawals for Solana, XRP, Cardano, Litecoin, Dogecoin, Polkadot, and Hedera ETFs. Even Ethereum staking ETFs saw their 19b-4s pulled. This happened right after the SEC approved its generic listing standards.
The New Express Lane for Crypto ETFs
The SEC approved these new exchange listing standards for crypto ETFs earlier this month. They did so on an accelerated basis, citing “good cause” to act quickly. This move isn’t just a minor tweak. It fast-tracks pending crypto ETF applications. It also cuts potential review timelines for new submissions from a lengthy 240 days to as little as 75 days. That’s a significant reduction in waiting time.
Now, exchanges like Nasdaq, NYSE Arca, and Cboe BZX Exchange can list and trade crypto funds that meet these generic standards. They can do this without filing new 19b-4 forms. There are some conditions, of course. The underlying asset, for example, must have a futures contract listed on a designated contract market for at least six months. This is one of several criteria.
Which assets fit this bill? Balchunas pointed out that Coinbase Derivatives is one such designated contract market. It lists futures for a number of cryptocurrencies. Beyond Bitcoin and Ethereum, this includes Litecoin, Bitcoin Cash, Dogecoin, Polkadot, Avalanche, Chainlink, Stellar, Solana, Hedera, Cardano, and XRP. That’s a rather comprehensive list, isn’t it?
The impact of such a change could be substantial. Balchunas drew a parallel to previous market shifts. “The last time they implemented generic listings standards for (stock and bond) ETFs, launches tripled,” he noted. He sees a similar boom for crypto. “Good chance we see north of 100 crypto ETFs launched in the next 12 months.”
We’ve already seen the U.S. market welcome spot Bitcoin ETFs in January and Ethereum ETFs in July 2024. These were big milestones. Now, dozens of new spot crypto ETF filings are waiting for the SEC’s nod. The landscape is certainly changing.
This shift isn’t happening in a vacuum. Paul Atkins became the SEC’s new chairman in April. Since then, he has promised a friendlier approach to digital assets. This new regulatory posture seems to be playing out in real time, creating a more welcoming environment for crypto products in traditional finance.
It feels like the crypto market is finally getting its moment in the sun, at least from a regulatory perspective. The path to mainstream adoption, through vehicles like ETFs, appears clearer than ever. What new opportunities will this open up for investors and innovators alike? We’ll certainly be watching.
