In a groundbreaking move, the U.S. Securities and Exchange Commission (SEC) has set the stage for a torrent of new crypto exchange-traded products (ETPs) to enter the market. By approving generic listing standards for “commodity-based trust shares” across major exchanges such as Nasdaq, Cboe BZX, and NYSE Arca, the SEC has effectively removed the cumbersome procedural hurdles that previously bogged down the process of getting new crypto products to market. This regulatory shift is poised to reshape the landscape of digital asset investment, though its impact on crypto prices remains uncertain.
Opening the Floodgates
Wednesday’s decision marks a pivotal moment for the crypto industry. By eliminating the need for each crypto ETP to undergo individual rule filings under Section 19(b) of the Exchange Act, the SEC has paved the way for a more streamlined and efficient listing process. Now, offerings can be listed using generic standards, provided their underlying assets meet certain objective eligibility tests. These tests include trading on a market that is a member of the Intermarket Surveillance Group (ISG) or having a futures contract listed on a CFTC-regulated designated contract market for at least six months.
Nate Geraci, a prominent ETF analyst and president of NovaDius Wealth Management, described the move as opening the “crypto ETF floodgates.” He anticipates a surge of new filings and launches, emphasizing that this development signifies crypto’s mainstream acceptance via the ETF wrapper. His sentiment is echoed by Matt Hougan, chief investment officer of digital asset management firm and ETF issuer Bitwise, who labeled the SEC’s decision a “coming of age” moment for the crypto industry.
A Historical Precedent
The potential for growth is backed by historical data. When the SEC approved generic listing standards for bond and stock-based products in 2019, the number of ETF launches more than tripled within a year. Matt Hougan pointed to this precedent, suggesting that a similar acceleration in crypto ETF launches could be on the horizon. However, he cautioned against assuming that new ETPs will automatically attract large inflows, noting that fundamental interest in the underlying asset is crucial.
For example, spot ether (ETH) ETFs had a slow start, only gathering meaningful inflows nearly a year after their launch. This uptick coincided with increased stablecoin activity and a strengthened Ethereum investment narrative. In contrast, products tied to smaller-cap assets with less tangible use cases might struggle to attract capital without renewed fundamentals.
The Price Impact Puzzle
The question on everyone’s mind is how this influx of crypto ETPs will affect digital asset prices. While the new framework dramatically lowers the barrier for traditional investors, making it easier for institutional and retail allocators to pivot into crypto, it doesn’t guarantee an immediate price surge. Hougan emphasized that the mere existence of a crypto ETP doesn’t ensure significant inflows; fundamental interest and market sentiment play pivotal roles.
Paul Howard, senior director of Wincent, noted that these vehicles provide a crucial wrapper for institutions unable to own spot crypto directly, thereby moving liquidity into the ecosystem. He highlighted that large-cap altcoins such as Dogecoin (DOGE), XRP (XRP), Solana (SOL), Sui (SUI), and Aptos (APT) stand to benefit the most as investors seek opportunities beyond bitcoin (BTC) and ether (ETH).
Bridging the Gap for Traditional Investors
One of the most significant advantages of the new SEC standards is the potential to demystify cryptocurrencies for mainstream audiences. When names like Avalanche (AVAX) and Chainlink (LINK) appear in brokerage accounts, it becomes easier for traditional investors to understand and trust these digital assets. As Hougan pointed out, ETPs make it far simpler for both institutional and retail investors to enter the crypto space once sentiment turns positive.
The shift also signals a greater acceptance of digital assets within the financial ecosystem, allowing new strategies and products to emerge. As these underlying assets are rolled into ETP wrappers, they help bridge the gap between traditional finance and the burgeoning world of cryptocurrencies.
Looking Ahead
As the crypto industry stands on the brink of this new era, market participants are both excited and cautious. The SEC’s decision is undoubtedly a milestone, but its long-term effects will depend on a variety of factors, including market sentiment, regulatory developments, and the broader economic landscape.
For now, the crypto community is gearing up for what could be a transformative period. With the floodgates open, the coming months are likely to bring a wave of innovation and investment opportunities, reshaping the digital asset market in ways we can only begin to imagine. However, as always, investors should approach this evolving landscape with a balanced perspective, keeping an eye on both the opportunities and the risks that lie ahead.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
