Altcoin ETFs Await SEC Decisions: A New Wave of Crypto Investment Looms

The cryptocurrency market could experience a transformative shift as altcoin-focused exchange-traded funds (ETFs) edge closer to potential approval by the U.S. Securities and Exchange Commission (SEC). According to Eric Balchunas, a senior ETF analyst at Bloomberg, the approval of these ETFs would usher in a “pretty wild” phase for crypto, barring any significant market collapse.

Growing Pipeline of Altcoin ETFs

Currently, 14 altcoin-related ETFs are under review by the SEC, with the next 12 months expected to bring decisions on funds offering exposure to a variety of assets, including Solana (SOL), XRP, Hedera (HBAR), Litecoin (LTC), and baskets of cryptocurrencies. Additionally, multi-asset ETFs combining Bitcoin (BTC) and Ethereum (ETH) are also in the mix.

Balchunas predicts the number of altcoin ETF applications could triple within two months, signaling heightened interest from asset managers eager to capitalize on evolving market conditions.

Political Shifts and ETF Momentum

Nate Geraci, CEO of ETF Store, believes the current political landscape could accelerate crypto ETF listings. Reflecting on past developments, he noted that the recent U.S. election results might embolden issuers to act more aggressively.

Since Geraci’s remarks, notable filings have surfaced. Canary Capital submitted an application for an HBAR ETF on Nov. 12, surprising some analysts who anticipated more prominent tokens in early filings. Bitwise followed up with a Solana trust registration on Nov. 21, and just days later, the NYSE applied to list a mixed BTC and ETH ETF from the same issuer.

Solana and Litecoin in the Spotlight

While the SEC has been cautious, Bloomberg analyst James Seyffart expects Solana-related ETFs could secure approval within two years. However, he acknowledged potential delays, citing previous setbacks such as the withdrawal of VanEck and 21Shares’ Solana ETF filings in August.

Litecoin, on the other hand, may face fewer regulatory hurdles. Canary Capital's October filing for a Litecoin ETF has drawn attention, as LTC is often viewed favorably due to its fair launch, lacking pre-mines or token sales. Alex Thorn, head of research at Galaxy Digital, underscored that the SEC is unlikely to classify LTC as a security, improving its chances for approval.

Uncertain Regulatory Landscape

Although optimism surrounds the expanding pipeline of crypto ETFs, the SEC’s stance remains ambiguous. The approval of altcoin ETFs would mark a significant milestone, potentially bringing institutional legitimacy and expanded investment opportunities to the crypto sector. However, the timing and conditions of these approvals are far from certain, leaving market participants eager for clarity.

As applications pile up and the SEC navigates this dynamic landscape, the fate of these funds will undoubtedly shape the future trajectory of cryptocurrency investments.