The potential approval of new spot cryptocurrency Exchange-Traded Funds (ETFs) could instigate an unprecedented regulatory era for the U.S. Securities and Exchange Commission (SEC), says Bitwise CEO Matt Hougan. This comes amid the surge in ETF applications for digital assets such as Dogecoin (DOGE), XRP, Solana (SOL), and Litecoin (LTC), leading industry specialists to speculate on the SEC’s forthcoming actions that could profoundly influence the future of cryptocurrency investment products.
The Trump administration’s dynamic approach to digital asset regulation triggered a rush among asset managers to file ETFs for a broad spectrum of cryptocurrencies. Among the recent filings are Tuttle Capital’s Solana-based Bonk (BONK) and even leveraged ETFs for the US First Lady token, MELANIA.
Although Hougan acknowledges that the approval of memecoin ETFs might be challenging, he is optimistic about the chances of ETFs for more established digital assets like XRP and Solana, provided the SEC alters its current stance.
Historically, the SEC has approved only those commodity-based ETFs that have regulated futures markets, like Bitcoin and Ethereum. This presents a significant hurdle for ETF approval as currently, no other cryptocurrency possesses a Commodity Futures Trading Commission (CFTC)-regulated futures market.
However, Hougan argues that if the SEC diverges from this precedent, it could lay the groundwork for new ETF approvals. “If we get past that period, then the doors open. We don’t know how open they are, but I’m betting it’s not just a crack,” he said.
Hougan draws attention to countries like Germany and Switzerland, where regulators have approved crypto ETFs beyond Bitcoin and Ethereum, without the need for a regulated futures market. If the U.S. emulates these practices, it could catalyze a considerable market expansion for digital asset investment products.
While the chances of speculative ETF applications like MELANIA gaining approval seem slim, Hougan believes that crypto assets closer to commodities stand a strong chance. Should the SEC relax its stance, new investment products could make digital assets like XRP, Solana, and Dogecoin more accessible to traditional investors via ETFs.
It’s important to note that these observations should not be construed as investment advice. Be sure to conduct thorough research and consult with a certified financial adviser before making any investment decisions.
