The U.S. Securities and Exchange Commission (SEC) has taken a significant step toward expanding the cryptocurrency landscape by approving generic listing standards for “commodity-based trust shares.” This development is expected to pave the way for a surge of new crypto exchange-traded products (ETPs) to enter the market, which analysts believe could fundamentally alter the flow of investments into digital assets.
As of Wednesday, these newly established rules will apply across regulated exchanges such as Nasdaq, Cboe BZX, and NYSE Arca. Crucially, the new regulations eliminate the requirement for individual crypto ETPs to undergo a tailored rule filing process under Section 19(b) of the Exchange Act. Instead, offerings that meet specific eligibility criteria—such as trading on markets that are members of the Intermarket Surveillance Group (ISG) or having their underlying asset’s futures contracts listed on a Commodity Futures Trading Commission (CFTC)-regulated designated contract market for a minimum of six months—will be able to utilize these generic standards.
This regulatory change is being interpreted as a watershed moment for the cryptocurrency sector, addressing the procedural obstacles that have historically hindered the introduction of new crypto products. Nate Geraci, a prominent ETF analyst and president of NovaDius Wealth Management, remarked, “The crypto ETF floodgates are about to open,” predicting a significant surge in new filings and product launches. He noted that the integration of cryptocurrency into the ETF framework signifies its mainstream acceptance.
Matt Hougan, chief investment officer at Bitwise, echoed this sentiment, describing the SEC’s decision as a “coming of age” for the crypto industry, indicating that it has arrived in the “big leagues.” He expects this development to be just the beginning, pointing to historical data showing that when the SEC adopted similar generic listing standards for bond and stock-based products in 2019, the number of ETF launches soared from 117 to 370 in just one year.
However, Hougan cautioned that the simple presence of new crypto ETPs does not guarantee significant capital inflows. He stressed the need for fundamental interest in the underlying assets to stimulate investment. For instance, he highlighted the gradual uptake of spot ether (ETH) ETFs, which began to see meaningful inflows nearly a year post-launch as the broader Ethereum narrative gained traction.
Conversely, he warned that products linked to smaller-cap assets with less clear use cases may face challenges in attracting investments without a resurgence in fundamental factors. Nevertheless, the introduction of ETPs significantly reduces barriers for traditional investors, making it easier for both institutional and retail investors to shift into the cryptocurrency market once market sentiment improves. Additionally, ETPs play a role in demystifying cryptocurrencies for a broader audience, with established cryptocurrencies such as Avalanche (AVAX) and Chainlink (LINK) becoming more commonplace in brokerage accounts.
Paul Howard, senior director at Wincent, added that these ETPs would help channel liquidity into the crypto ecosystem, particularly for institutions that are unable to hold spot cryptocurrencies directly. He pointed out that large-cap altcoins like Dogecoin (DOGE), XRP, Solana (SOL), and Aptos (APT) are likely to benefit from this new environment as investors explore opportunities beyond Bitcoin and Ethereum.
The SEC’s recent move not only signals maturity in the regulatory landscape but also sets the stage for a potential transformation in how digital assets are perceived and integrated into traditional investment strategies.
