In a significant shift for the cryptocurrency market, CoinShares, one of the largest firms focused on digital assets, has announced it will withdraw all applications to launch spot crypto Exchange-Traded Funds (ETFs) in the United States. This move includes the withdrawal of applications related to XRP, Solana (SOL), and Litecoin (LTC), as well as the winding down of its bitcoin futures leveraged ETF.
The development comes amid a burgeoning interest in spot crypto ETFs, as various issuers have recently sought to navigate the U.S. Securities and Exchange Commission’s rigorous approval process by putting forth applications that eliminate the “delaying amendment” clause. This amendment has traditionally complicated the launch of financial products, but some new ETFs have managed to debut successfully in November, indicating renewed momentum in this area.
CoinShares had previously positioned itself to capitalize on this trend by filing for three distinct spot ETFs. However, the company’s CEO, Jean-Marie Mognetti, expressed reservations about the potential for differentiation in the space, citing limited opportunities for sustainable margins as the market consolidates around dominant players in single-asset crypto exchange-traded products (ETPs).
Instead of continuing down this path, CoinShares has decided to redirect its focus toward higher-margin opportunities in anticipation of its upcoming U.S. listing. This listing comes as part of a significant strategic shift announced in September, when CoinShares unveiled plans for a merger with special purpose acquisition company (SPAC) Vine Hill Capital Investment Corp., valuing the company at approximately $1.2 billion.
Despite CoinShares’ exit from the competition, the demand for spot ETFs focusing on altcoins has remained robust. Notably, Bitwise’s spot Solana ETF achieved impressive trading volume following its debut earlier this year, recording a staggering $57 million on its opening day. This record was soon eclipsed by Canary Capital’s XRPC ETF, which achieved a trading volume of nearly $60 million shortly after its mid-November introduction.
In the following weeks, a host of new spot crypto ETFs emerged, including various funds tracking XRP and Grayscale’s DOGE ETF. However, none of these new offerings managed to exceed the initial trading volumes set by Bitwise and Canary Capital.
Recent data indicates that XRP ETFs have garnered more than $660 million in inflows within just over two weeks of their launch, while SOL ETFs have attracted approximately $620 million. In stark contrast, the DOGE ETF has underperformed, with only $2.16 million reported in total net inflows as of Friday.
As CoinShares pivots its business strategy, the broader landscape of cryptocurrency ETFs continues to evolve, driven by strong investor interest and a dynamic regulatory environment. This shift underscores the ongoing challenges and opportunities faced by companies operating within the rapidly changing crypto market.
