Crypto ETF ’Floodgates’ Open With SEC Listing Standards - But Brace for Uneven Price Impact
The SEC just ripped open the crypto ETF floodgates—but don't expect a uniform tidal wave across all digital assets.
Regulatory Green Light Meets Market Reality
Approval standards finally drop, yet institutional money flows won't lift all boats equally. Bitcoin and Ethereum ETFs grab the spotlight while altcoins fight for scraps of capital.
Selective Capital Deployment
Big money targets established names first—the crypto equivalent of buying blue chips while ignoring emerging innovators. Traditional finance's herd mentality strikes again, favoring perceived safety over actual potential.
Market Fragmentation Ahead
Watch liquidity cluster around approved ETFs while the rest of the ecosystem scrambles for attention. The supposed 'democratization' of crypto investing suddenly looks suspiciously like Wall Street's usual playground.
Because nothing says 'financial revolution' like letting institutions determine which digital assets deserve premium valuation—while they collect management fees on every trade.
What's next?
The regulatory shift marks a watershed for the crypto industry, removing much of the procedural drag that has historically slowed getting new crypto products to the market, analysts said.
"[The] crypto ETF floodgates are about to open," said Nate Geraci, a well-followed ETF analyst and president of NovaDius Wealth Management.
"Expect an absolute deluge of new filings and launches," he said. "You may not like it, but crypto is going mainstream via the ETF wrapper."
Matt Hougan, chief investment officer of digital asset management firm and ETF issuer Bitwise, said the SEC's MOVE is a "coming of age" moment for crypto.
"[It's] a signal that we’ve reached the big leagues," he wrote. "But it’s also just the beginning."
History backs up predictions that the number of new crypto ETF launches will accelerate under the new regime.
When the SEC approved generic listing standards for bond and stock-based products in 2019, the number of ETFs launches more than tripled in a year, rising to 370 from 117 the year before, Hougan pointed out.
What does it mean for crypto prices?
Hougan cautioned against assuming new crypto ETPs will automatically drive large inflows. "The mere existence of a crypto ETP does not guarantee significant inflows," he wrote. "You need fundamental interest in the underlying asset."
Take, for example, the slow start of spot ether ETFs. They only began gathering meaningful inflows nearly a year after launch, once stablecoin activity and — by extension — Ethereum's investment narrative picked up, Hougan wrote.
By contrast, products tied to smaller-cap assets with less tangible use cases may struggle to attract capital absent renewed fundamentals, he added.
Still, he argued that ETPs dramatically lower the barrier for traditional investors, making it far easier for institutional and retail allocators to pivot into crypto once sentiment turns. They also help demystify cryptocurrencies for mainstream audiences when names like Avalanche and chainlink appear in brokerage accounts, Hougan said.
"What we are seeing now are underlying assets further down the value curve being rolled into these wrappers and strategies," Paul Howard, senior director of Wincent told CoinDesk in a note. "For institutions that cannot own spot [crypto] directly, these vehicles provide a wrapper and move liquidity into the ecosystem."
The tokens most likely benefitting from this are large-cap altcoins. "DOGE, XRP, SOL, SUI, APT and others are now ushering in the next wave of [products] as investors look for opportunities and applications outside of BTC and ETH," Howard said.
