A senior analyst at Bloomberg has stated that the approval odds for several spot cryptocurrency exchange-traded funds (ETFs), including those for Solana, Litecoin, and XRP, are now effectively 100%. This assessment follows a significant procedural change by the U.S. Securities and Exchange Commission (SEC) that streamlines the listing process for new digital asset products.
The SEC's adoption of generic listing standards has rendered the previous, time-consuming 19b-4 filing deadlines irrelevant, paving the way for a much faster approval timeline for a new wave of crypto investment vehicles.
Key Takeaways
- A Bloomberg ETF analyst now sees a 100% chance of approval for spot Solana, Litecoin, and XRP ETFs.
- The SEC has adopted new "generic listing standards," which accelerate the approval process for crypto ETFs.
- This change makes the previous 19b-4 filing system and its associated deadlines obsolete for qualified assets.
- The new rules could reduce the review timeline for new crypto ETFs from 240 days to as short as 75 days.
- Experts predict that over 100 new crypto ETFs could be launched in the U.S. within the next 12 months.
A Shift in Regulatory Procedure
According to Bloomberg Senior ETF Analyst Eric Balchunas, the regulatory landscape for cryptocurrency ETFs has fundamentally changed. The SEC's recent decision to approve new generic listing standards for exchanges has removed a major hurdle that previously defined the application timeline.
"Honestly, the odds are really 100% now," Balchunas stated. "Generic listing standards make the 19b-4s and their 'clock' meaningless. That just leaves the S-1s waiting for a formal green light from [the SEC's Division of Corporation Finance]."
This development marks a significant departure from the previous system. Previously, exchanges like Nasdaq and Cboe BZX had to file specific 19b-4 forms for each new crypto ETF, which started a lengthy review clock with set deadlines. The SEC's move to a generic standard bypasses this step for certain assets.
Background: The Two-Step ETF Application
Historically, launching an ETF in the U.S. required two key SEC approvals. First, the exchange where the ETF will trade files a 19b-4 form to propose a rule change allowing the new product. Second, the ETF issuer files an S-1 registration statement, which is a prospectus detailing the fund's investment objectives and risks. The new standards largely eliminate the need for the first step for many crypto products.
The New Fast-Track for Crypto ETFs
The SEC approved the new exchange listing standards on an accelerated basis earlier this month, citing "good cause" to act ahead of schedule. This move is designed to fast-track pending crypto ETF applications and significantly shorten the review period for future submissions.
Under the new framework, the potential review timeline can be reduced from a maximum of 240 days to as little as 75 days. This efficiency is expected to encourage more issuers to enter the market.
Key Listing Requirement
For an exchange to list a crypto ETF under the new generic standards, the underlying digital asset must have a futures contract that has been listed on a designated contract market for at least six months. This requirement is intended to ensure the asset has a mature and regulated derivatives market.
Which Assets Qualify?
This new pathway is not open to all cryptocurrencies. It specifically benefits those with established futures markets. According to Balchunas, Coinbase Derivatives is one such designated market that lists futures for a number of digital assets, including:
- Litecoin (LTC)
- Solana (SOL)
- XRP
- Dogecoin (DOGE)
- Cardano (ADA)
- Polkadot (DOT)
- Avalanche (AVAX)
- Chainlink (LINK)
The existence of these futures contracts provides the SEC with a regulated market for price discovery, which has been a key factor in its past approvals of Bitcoin and Ethereum ETFs.
Market Impact and Future Outlook
The procedural change is expected to lead to a significant increase in the number of crypto-related investment products available to U.S. investors. This follows the successful launches of spot Bitcoin ETFs in January 2024 and spot Ethereum ETFs in July 2024, which demonstrated strong investor demand.
Balchunas drew a parallel to a previous regulatory streamlining for traditional stock and bond ETFs. "The last time they implemented generic listings standards for [stock and bond] ETFs, launches tripled," he noted. Based on this precedent, he projects a substantial expansion in the crypto ETF space.
"Good chance we see north of 100 crypto ETFs launched in the next 12 months," he predicted.
A New Era at the SEC
This regulatory shift coincides with a change in leadership at the SEC. Paul Atkins, who became the agency's new chairman in April, has indicated a more constructive approach toward digital assets. This stance is seen by many in the industry as a positive sign for future product approvals and clearer regulatory guidelines.
While deadlines for Litecoin, Solana, and XRP ETFs were previously set for October, the new rules mean the SEC could approve or deny these applications at any time. The focus has now shifted entirely to the final review of the issuers' S-1 registration statements.
The recent withdrawals of several 19b-4 filings for Solana, XRP, and other crypto ETFs are now seen as a procedural formality, as issuers and exchanges adapt to the new, more direct path to market.
