Why Crypto ETF Launches Are Still Stuck in Regulatory Limbo
The crypto ETF waiting game drags on—while Wall Street sweats and retail traders meme.
Regulators keep kicking the can down the road, leaving billions in potential capital on the sidelines. The SEC's latest delay tactic? 'Concerns about market manipulation'—as if traditional markets are purity incarnate.
Here's what's really happening behind the scenes:
• Institutional players want in but won't touch unregulated exchanges
• Politicians can't decide whether to cash in or crack down
• Meanwhile, crypto natives shrug and keep stacking sats
The irony? These delays only prove why we need ETFs in the first place. When the suits finally greenlight them, expect the mother of all FOMO rallies—right after they've accumulated their positions, naturally.
In case you missed it, a Grayscale spokesperson told me: “While this development was unexpected, it reflects the dynamic and evolving nature of the regulatory landscape surrounding a first-of-its-kind digital asset product like GDLC.”
The firm is still pursuing the GDLC listing. Just as Bitwise still looks to convert its Bitwise 10 Crypto Index Fund (BITW) to an ETF and Hashdex wants to add assets to its Nasdaq Crypto Index US ETF (NCIQ).
We don’t have an update on the Bitwise and Hashdex proposals. So we’re in a bit of a holding pattern.
That didn’t stop Yorkville America Digital (in partnership with Trump Media and Technology Group) from filing for a Truth Social Crypto Blue Chip ETF on Tuesday. That fund’s expected holdings would be Bitcoin (70%), ether (15%), solana (8%), cronos (5%) and XRP (2%).
A spokesperson did not immediately comment on the rationale behind those proposed allocations (or cronos’ inclusion), though we do know Crypto.com (a partner of Trump Media) developed the Cronos blockchain. CRO’s market cap this morning ranked 44th among crypto assets, according to CoinGecko.
To summarize, the paperwork progress hasn’t yet led to launches. Well, except for the REX-Osprey SOL Staking ETF (a product structured differently than traditional crypto trusts).
As for the spot crypto ETFs trading, the US bitcoin products have been on an inflow tear. Those funds have seen net inflows on 18 of the last 19 trading days (totaling $5.6 billion over that span). The segment sits on the $50 billion net inflow precipice, according to Farside Investors.
What about US ETH ETF inflows from June 9 to July 7? A respectable $1.1 billion.
Overall, we’re up to 12 straight weeks of inflows for crypto investment products, CoinShares data shows — pushing AUM to a record $188 billion.
I’m curious what sort of demand we see for other single-asset crypto ETFs once they go live in the US. Some believe the bigger opportunity is those crypto index funds — tailored for investors who don’t want to spend the time trying to pick individual winners.
I’d say that take makes sense, but we’ll see what the market thinks soon enough.
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