The 92 cryptocurrency exchange-traded funds awaiting approval from the SEC will test the depth of investor appetite for more specialized digital assets. Following the success of bitcoin and ether ETFs launched last year, crypto firms are betting that investors will show similar interest in lesser-known entities such as Avalanche and Litecoin. Whether the demand materializes will depend on how quickly the SEC breaks through the logjam of products awaiting approval.
The list of pending applications surfaced through research by James Seyffart, an analyst at Bloomberg. Eight of the potential offerings are invested in Solana, while another seven would hold XRP. Additional offerings include Dogecoin, Melania, and Cardano.
Many of these funds have been awaiting approval for some time. In April, Bloomberg reported that 72 crypto-related ETFs were pending approval, indicating that 20 more ETFs have been filed over the past four months.
The queue continues to grow. Earlier this week, 21Shares sought approval from the SEC to launch the first ETF invested in SEI, the token used by the Sei blockchain.
Slow Movement from the SEC
There’s no telling when these approvals might come, if at all. Grayscale filed for approval of its Cardano ETF in February and was initially told that it would receive a decision by August. This week, the SEC informed Grayscale that a decision would now come at the end of October. Grayscale is also seeking approval to convert five existing trusts into ETF structures.
The delay may be due to a lack of personnel. The SEC has lost roughly 15% of its staff this year after the Trump administration offered buyout packages to all employees.
The markets are taking steps to address the backlog and prevent it from happening again. In July, the New York Stock Exchange, Chicago Board of Exchange, and Nasdaq proposed listing standards for crypto ETFs that would expedite the process for these vehicles to trade publicly.
A Lucrative Niche
The market for crypto funds remains lucrative. Last year, the world’s largest asset manager, Blackrock, launched the iShares Bitcoin Trust ETF. It now generates more in fees from that fund than from its flagship S&P 500 fund.
Blackrock has since launched similar funds in Canada and Europe and has begun offering options trading on its bitcoin ETF. However, Blackrock currently has no other crypto ETFs pending before the SEC.
