The U.S. Securities and Exchange Commission (SEC) has implemented new standards that significantly streamline the approval process for cryptocurrency exchange-traded funds (ETFs). This regulatory shift is expected to trigger a surge of new investment products tied to a wide range of digital assets beyond Bitcoin and Ethereum.
Asset managers are now preparing to launch ETFs for cryptocurrencies such as Solana, XRP, and Cardano, capitalizing on a faster path to market and growing investor interest in the digital asset class.
Key Takeaways
- The SEC adopted new listing standards, reducing the approval time for qualifying crypto ETFs from up to 270 days to 75 days or less.
- The revised rules eliminate the need for a lengthy, case-by-case review for each new crypto ETF application that meets specific criteria.
- Asset managers have already filed numerous applications for ETFs based on alternative cryptocurrencies, with the first launches under the new framework anticipated as early as October.
- Grayscale Investments has already launched a multi-coin crypto fund, GDLC, under the updated regulations, including assets like XRP, Solana, and Cardano.
New SEC Framework Accelerates ETF Launches
The SEC's decision to update its ETF listing standards marks a significant change in its approach to digital asset investment products. Previously, each crypto ETF proposal underwent an extensive and individualized review process that could last up to 270 days. The new framework changes this dynamic entirely.
Under the revised rules, products that meet predetermined criteria can launch much more quickly. According to industry sources, the approval timeline for new crypto ETFs will be slashed to 75 days or less. This expedited process removes a major barrier for asset management firms looking to introduce new funds.
"Those filings are pretty far along in the review process," said Teddy Fusaro, president of crypto asset manager Bitwise. "These are the rules we had been anticipating." The change allows issuers to bring products to market faster, responding more nimbly to investor demand.
Background on ETF Approvals
Exchange-Traded Funds (ETFs) are investment funds traded on stock exchanges, much like stocks. Before the recent rule change, launching an ETF tied to a novel asset like a specific cryptocurrency required a lengthy and uncertain approval process from the SEC. The first spot Bitcoin and Ethereum ETFs, launched in 2024, were approved under this older, more stringent system.
Criteria for a Faster Path to Market
To qualify for the accelerated approval process, a proposed ETF must satisfy at least one of three main conditions set by the regulator. These standards are designed to ensure that the underlying digital asset has a sufficient level of market maturity and regulatory oversight.
The three qualifying criteria are:
- The underlying cryptocurrency already trades on a regulated market.
- The cryptocurrency has futures contracts regulated by the U.S. Commodity Futures Trading Commission (CFTC) that have been trading for at least six months.
- Another ETF linked to the same cryptocurrency already exists and holds at least 40% of its assets directly in the coin, rather than in derivatives like options or swaps.
These conditions create a clear pathway for funds based on established digital assets. "The next step is to talk to our lawyers to see which products can move forward and how rapidly will they get onto the market," noted Kyle DaCruz, director of digital assets product at VanEck, acknowledging that not all of their existing filings may qualify immediately.
A Flood of New Products Expected
The regulatory green light has prompted a rush among asset managers to prepare new offerings. Analysts predict the first ETFs approved under the new system, likely focusing on coins like Solana and XRP, could debut in early October.
"We've got about a dozen filings with the SEC now, and more coming," stated Steven McClurg, founder of Canary Capital Group, a digital assets investment firm. "We're all getting ready for a wave of launches."
Market Snapshot
Currently, there are 21 U.S. ETFs that hold either Bitcoin, Ethereum, or a mix of both. The new rules are set to dramatically expand this number to include a much wider variety of digital currencies.
Grayscale Investments moved quickly following the SEC's announcement. Less than 48 hours after receiving approval, the firm converted its Grayscale CoinDesk Crypto 5 (GDLC) fund from a private placement to a publicly traded ETF. The fund holds a basket of cryptocurrencies, including Bitcoin, Ethereum, XRP, Solana, and Cardano.
Peter Mintzberg, CEO of Grayscale, said the approval of its new ETF reflected the firm's advocacy for "public market access, regulatory clarity and product innovation."
Legal experts anticipate a busy period for new launches. Jonathan Groth, a partner at DGIM Law, suggested that the fourth quarter of 2025 is shaping up to be a "boom time" for crypto ETF issuers as they take full advantage of the streamlined process.
Questions Linger Over Investor Demand
While the supply of crypto ETFs is set to explode, the level of investor appetite for products tied to lesser-known digital assets remains a key uncertainty. The initial Bitcoin and Ethereum ETFs attracted significant capital, but it is unclear if funds based on other coins will see similar interest.
The industry faces the challenge of educating investors about these new assets and their potential role within a diversified portfolio. Many of the tokens that will soon be available in an ETF wrapper are unfamiliar to the general public.
"There will be a flood of tokens that many folks have never heard of," said VanEck's Kyle DaCruz. He highlighted the educational hurdle ahead, noting that unlike Bitcoin, which had years of public exposure before its ETF launch, these new products will have only weeks or months to build investor awareness and confidence.
The success of this new wave of crypto ETFs will depend not only on the simplified regulatory pathway but also on whether asset managers can effectively communicate the value proposition of these alternative digital assets to a broad investor base.
