1. New standards set by SEC:
- The U.S. Securities and Exchange Commission (SEC) has issued new standards for listing ETFs linked to cryptocurrencies.
- Any cryptocurrency that has futures traded for at least 6 months in approved markets (like the CBOE) will be eligible for listing.
2. 12 eligible cryptocurrencies:
- Among them: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), Cardano (ADA), Avalanche (AVAX), Chainlink (LINK), Litecoin (LTC), Polkadot (DOT), Dogecoin (DOGE), Stellar (XLM), and Shiba Inu (SHIB).
- Approval for Solana and Ripple ETFs is expected by October after the 6-month period for futures contracts is completed.
3. Transfer of powers to CFTC:
- The Commodity Futures Trading Commission (CFTC) has become the overseeing body for approving ETFs for cryptocurrencies, not the SEC.
- There is no requirement for the cryptocurrency to have a minimum market value or certain liquidity; having futures contracts is sufficient.
4. Accelerating approval processes:
- The new framework reduces the review period to just 75 days.
- The SEC has eliminated the need to submit a separate application for each fund, making the listing process easier.
5. SEC approval of the creation and redemption mechanism in kind:
- Investors can exchange shares of the funds for cryptocurrencies directly (instead of cash), reducing tax costs.
6. Increased institutional demand:
- Bitcoin ETFs have attracted investments worth $55.11 billion, while Ethereum ETFs have seen strong investment inflows.
- Major companies like BlackRock and Grayscale have applied to launch new funds.
7. Expectations for the approval of more funds:
- Analysts expect SEC approval for Solana, Ripple, and Litecoin ETFs at a rate of 95% before the end of 2025.
Conclusion:
The new regulatory framework from the SEC paves the way for faster approval of ETFs for additional cryptocurrencies, with a shift of powers to the CFTC. This development could enhance the adoption of cryptocurrencies by financial institutions and broaden investment in them.
