In a significant development within the cryptocurrency space, Dogecoin and XRP have experienced notable price rallies as their exchange-traded funds (ETFs) launched on Thursday, coinciding with the U.S. Securities and Exchange Commission’s (SEC) announcement of new “generic listing standards” for crypto ETPs (exchange-traded products). This regulatory shift could pave the way for a more streamlined approval process for crypto ETFs.
Bitwise Chief Investment Officer Matt Hougan emphasized that under the new rules, filings that meet specific criteria could receive automatic approval within 75 days. This represents a significant acceleration compared to the previous method, which relied on a slow case-by-case assessment. Potential eligibility criteria hint at the inclusion of regulated futures contracts, opening the possibility for future ETFs tied to other cryptocurrencies such as Solana, Chainlink, and Cardano.
Historical precedent indicates that changes to ETF regulations can lead to a surge in launches; after similar adjustments were implemented for traditional ETFs in 2019, the annual rate of launches tripled. While experts caution that not every crypto ETP will attract massive inflows, the anticipated increase in accessibility could enhance visibility and perceived legitimacy across a range of altcoins, potentially introducing greater volatility in the market.
In an interview with CryptoSlate, CryptoQuant’s head of research provided some insight into potential market effects, estimating that between 1% to 4% of XRP’s circulating supply—equivalent to approximately 600 million to 2.4 billion tokens—could be absorbed by ETFs in their first year. At current values, this translates to an estimated worth of between $1.8 billion and $7.2 billion.
The initial trading volumes for both Dogecoin and XRP ETFs have been impressive. Bloomberg’s Senior ETF Analyst Eric Balchunas reported that the Dogecoin ETF recorded a trading volume of $5.8 million within the first hour, a remarkable figure considering the average first-hour trading volume for new ETFs is usually around $1 million. Meanwhile, the XRP spot ETF saw a staggering volume of $24 million within just 90 minutes of its launch, underscoring heightened demand compared to existing futures-based XRP ETFs.
As the cryptocurrency market evolves with these new regulatory frameworks, many are closely watching the impact of easier access to crypto investment vehicles, which may further shape the landscape of digital asset trading.
