The U.S. Securities and Exchange Commission (SEC) has postponed rulings on major cryptocurrency exchange-traded fund (ETF) applications, underscoring the agency’s current challenges in processing a rapidly increasing volume of submissions.
In documents filed on April 24, the SEC announced delays in decisions regarding ETF applications from Bitwise for funds focused on Bitcoin and Ethereum, and Canary Capital for a proposed Hedera ETF. These delays extend the final determination deadlines to June 10 and June 11, respectively. In each case, the Commission justified the extension by stating a need for more thorough assessment and consideration of public input.
These latest postponements are part of an ongoing pattern, as the SEC attempts to manage an expanding backlog of ETF proposals from numerous asset managers. Recently, Grayscale’s submission to convert its Polkadot Trust into a fully-fledged ETF also encountered delays, with a revised decision date now scheduled for June 11.
Complicating the regulatory climate is a leadership transition at the SEC, now led by Paul Atkins, who is recognized for his openness toward cryptocurrencies. Atkins’s recent appointment as SEC Chair has prompted speculation within the industry regarding a potential softening in the agency’s historically cautious approach towards digital asset ETFs. His leadership might facilitate a path toward greater accommodation of crypto-oriented financial products.
The trend of ongoing delays occurs amid increased industry scrutiny and an influx of proposals for ETFs based on alternative cryptocurrencies and meme coins. Currently pending decisions include ETFs linked directly to assets such as Solana, Ripple, Litecoin, Dogecoin, Chainlink, Binance Coin, Aptos, Cardano, Avalanche, Axelar, and Sui. Additionally, newer meme-based cryptocurrencies, like the tokens for Pudgy Penguins and Official Trump, are also awaiting ETF approval decisions.
Alongside individual cryptocurrency-focused ETFs, the SEC is reviewing proposals for hybrid and curated index-style funds, encompassing multiple cryptocurrencies within single investment vehicles.
Nonetheless, analysts suggest confidence that Bitcoin-focused ETFs will likely continue to dominate the cryptocurrency ETF market. Despite the anticipated arrival of altcoin and meme coin ETFs, Bitcoin remains the preferred investment product for institutions and mainstream investors, currently comprising approximately 90% of the global crypto-based fund asset allocation. Even with the prospective influx of altcoins into the ETF landscape, Bitcoin is expected to preserve its significant dominance over time.
